34 Tex. Admin. Code § 3.31 - Occupation Tax on Oil Which Is Lost After Having Been Run to Lease Tank

(a) Occasionally the loss of oil is reported after it has been run to the lease tank. These losses may result from such things as fires caused by tanks being struck by lightning, tanks washed away by flood waters, leakage from tanks, and theft.

(b) The tax levied by the Texas Tax Code, §202.002, is an occupation tax and is based upon the total barrels of oil produced or salvaged from the earth or waters of this state without any deductions. Thus the tax accrues on oil that may be lost, in any manner, after it has been run to the lease tank.