(1)For the purposes of paying the expenses of administration of this act and for the privilege of extracting oil and gas in this state, there is hereby levied and imposed on all oil and gas produced, saved and sold or transported from the premises in Idaho where produced a tax of two and one-half percent (2.5%) of the gross income received by the producer of the oil and gas produced. "Gross income" shall mean the amount realized by the producer for sale of the oil and gas, whether the sale occurs at the wellhead or after transportation of the product, without deduction for marketing, transportation, manufacturing, and processing costs borne by the producer. Where the parties to the sale are related parties and the sales price is lower than the price for which that oil and gas could otherw
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(1) For the purposes of paying the expenses of administration of this act and for the privilege of extracting oil and gas in this state, there is hereby levied and imposed on all oil and gas produced, saved and sold or transported from the premises in Idaho where produced a tax of two and one-half percent (2.5%) of the gross income received by the producer of the oil and gas produced. "Gross income" shall mean the amount realized by the producer for sale of the oil and gas, whether the sale occurs at the wellhead or after transportation of the product, without deduction for marketing, transportation, manufacturing, and processing costs borne by the producer. Where the parties to the sale are related parties and the sales price is lower than the price for which that oil and gas could otherwise have been sold to a ready, willing, and able buyer and where the taxpayer was legally able to sell the oil and gas to such a buyer, gross income shall be determined by reference to comparable arms-length sales of like kind, quality, and quantity in the same field or area. For purposes of this subsection, "related parties" shall be as defined in section 267 of the Internal Revenue Code, as defined, in section 63-3004, Idaho Code. This tax is in addition to all other taxes provided by law. It shall be the duty of the state tax commission to enforce collection of this tax and to make such rules as may be necessary, pursuant to the provisions of chapter 52, title 67, Idaho Code. All money so collected shall be remitted to the state treasurer for deposit in the oil and gas conservation fund, which fund is hereby created in the office of the state treasurer of the state of Idaho.
(2) The persons owning an interest, working interest, royalty interest, payments out of production, or any other interest in the oil and gas, or in the proceeds thereof, shall be liable for such tax in proportion to their ownership at the time of production. The tax so assessed and fixed shall be payable monthly, and the sum so due shall be remitted to the state tax commission, on or before the twentieth of the month following the month in which the tax accrued, by the producer on behalf of himself and all other interested persons. The person remitting the tax, as herein provided, is hereby empowered and required to deduct from any amounts due the persons owning an interest in the oil and gas, or in the proceeds thereof, at the time of production a proportionate amount of such tax before making payment to such persons.
(3) The tax imposed by this section shall apply to all lands in the state of Idaho, anything in this act to the contrary notwithstanding; provided however, there shall be exempted from the tax hereinabove levied and assessed the following, to wit:
(a) The interest of the United States of America and the interest of the state of Idaho and the political subdivisions thereof in any oil and gas or in the proceeds thereof.
(b) The interest of any Indian or Indian tribe in any oil and gas or the proceeds thereof, produced from lands subject to the supervision of the United States.
(c) Oil and gas used in producing operations or for repressuring or recycling purposes.
(4) To the extent that such sections are not in conflict with the provisions of this act, the deficiency in tax and notice of deficiency as well as the collection and enforcement procedures provided by the Idaho income tax act, sections 63-3038, 63-3039, 63-3040, 63-3042 through 63-3065A, 63-3068, 63-3071 and 63-3075 through 63-3078, Idaho Code, shall apply and be available to the state tax commission for enforcement of the provisions of this act and the assessment and collection of any amounts due. Said sections shall for this purpose be considered a part of this act and wherever liens or any other proceedings are defined as income tax liens or proceedings they shall, when applied in enforcement or collection pursuant to this act, be described as an oil and gas tax lien or proceeding.
The state tax commission may be made a party defendant in an action at law or in equity by any person aggrieved by the unlawful seizure or sale of his property, or in any suit for refund or to recover an overpayment, but only the state of Idaho shall be responsible for any final judgment secured against the state tax commission, and said judgment or any other amount erroneously or illegally collected shall be paid or satisfied out of the state refund account created by section 63-3067, Idaho Code.
(5) All moneys collected under this chapter shall be distributed by the state tax commission as follows:
(a) An amount of money shall be distributed to the state refund account sufficient to pay current refund claims. All refunds authorized under this chapter by the state tax commission shall be paid through the state refund account, and those moneys are continuously appropriated.
(b) For the balance of the proceeds, forty percent (40%) shall be distributed by the end of the month following each monthly due date by the state tax commission into any oil and gas revenue share account as follows:
(i) Forty-four percent (44%) is hereby appropriated and shall be paid to the current expense fund of the county from which the oil and gas was produced, to be used to mitigate the impacts associated with oil and gas production, development and transportation in that county;
(ii) Twenty-eight percent (28%) is hereby appropriated and shall be paid to the cities within the county from which the oil and gas was produced. Such funds shall be distributed to each city based upon the proportion that the city’s population bears to the total population of all of the cities within the county; and
(iii) Twenty-eight percent (28%) is hereby appropriated and shall be paid to the public school income fund.
(c) The remainder of the moneys deposited into the oil and gas conservation fund, sixty percent (60%) of the proceeds after refunds, may be expended pursuant to legislative appropriation and shall be used for defraying the expenses of the oil and gas conservation commission in carrying out the provisions of this act. At the beginning of each fiscal year, those moneys in the oil and gas conservation fund, after applicable refunds and distribution as noted in paragraphs (a) and (b) of this subsection, that exceed two hundred percent (200%) of the current year’s appropriations for the oil and gas conservation commission shall be transferred to the general fund. The oil and gas conservation commission shall audit all bills for salaries and expenses incurred in the enforcement of this act that may be payable from the oil and gas conservation fund that shall be audited, allowed and paid as to the claims against the state.