§ 26-58-111 - Rate of tax. - Arkansas Statutes

26-58-111. Rate of tax.

The severance tax is to be predicated upon the quantity severed and at the following rates:

(1) On barite, bauxite, titanium ore, manganese and manganiferous ores, zinc ore, and cinnabar, fifteen cents (15cent(s)) per ton of two thousand pounds (2,000 lbs.);

(2) On coal, lignite, and iron ore, two cents (2cent(s)) per ton of two thousand pounds (2,000 lbs.);

(3) On gypsum not used for manufacturing within Arkansas into ultimate consumer's goods, or sold for manufacturing within Arkansas into ultimate consumer's goods, and chemical grade limestone, silica sand, and dimension stone, one and one-half cents (11/2cent(s)) per ton of two thousand pounds (2,000 lbs.);

(4) On crushed stone including, but not limited to, chert, granite, slate, novaculite, and limestone, and on construction sand, gravel, clay, chalk, shale, and marl, one cent (1cent(s)) per ton of two thousand pounds (2,000 lbs.);

(5) On natural gas, the following percent of the market value of the natural gas severed within the State of Arkansas:

(A) On new discovery gas, as defined in 26-58-101(12), the severance tax rate shall be one and one-half percent (1.5%) for the time period provided in 26-58-127(a);

(B) On high-cost gas, as defined in 26-58-101(6), the severance tax rate shall be one and one-half percent (1.5%) for the time periods provided in 26-58-127(b);

(C) On marginal gas, as defined in 26-58-101(8), the severance tax rate shall be one and one-quarter percent (1.25%); and

(D) On all natural gas that is not defined as new discovery gas, high-cost gas, or marginal gas, the severance tax rate shall be five percent (5%);

(6) (A) On oil, five percent (5%) of the market value at time and point of severance.

(B) However, whenever the production of oil from a well which is measured separately or from a group of wells which is measured separately, including any well or wells that are utilized for the injection of salt water or other effluents for pressure maintenance or secondary recovery purposes, averages ten (10) barrels or less per well per day during any calendar month, the privilege or license tax on oil produced from that well or group of wells during that month shall be computed at the rate of four percent (4%) of the market value at time and point of severance.

(C) The Director of the Department of Finance and Administration shall have the power to promulgate such reasonable rules and regulations as shall be necessary to effectively enforce the foregoing provisions;

(7) On timber, the tax shall be collected, reported, and remitted by each primary processor and shall be computed on the weight of such timber as determined at the last time the timber is weighed prior to undergoing the first processing after severance thereof and shall be at the following rates:

(A) On all pine timber, seventeen and eight-tenths cents (17.8cent(s)) per ton of two thousand pounds (2,000 lbs.);

(B) On all other timber, twelve and five-tenths cents (12.5cent(s)) per ton of two thousand pounds (2,000 lbs.); and

(C) (i) If any primary processor of timber is unable to weigh the timber as required herein because an approved weight scale is not available, the primary processor shall use the following conversion factors to convert other measurements of timber to weight: Click here to view image.

(ii) If the above conversion factors are not appropriate for conversion of any particular measurement of timber to weight, the director, with the advice and approval of the Arkansas Forestry Commission, shall develop an appropriate conversion procedure to produce equivalent rates;

(8) On diamonds, fuller's earth, ochre, natural asphalt, native sulphur, salt, pearls and other precious stones, whetstone, novaculite, and on all other natural resources, except gypsum, not otherwise specifically identified under the severance tax laws of this state, except mussel shells, five percent (5%) of the fair market value at the time of severance;

(9) On salt water whose naturally dissolved components, or solutes, are used as source raw materials for bromine and other products derived from the same salt water used in the bromine production, two dollars and forty-five cents ($2.45) per one thousand (1,000) barrels, forty-two thousand United States gallons (42,000 U.S. gals.); and

(10) (A) Except as provided in subdivision (10)(B) of this section, on all other natural resources not otherwise specifically identified under the severance tax laws of this state, five percent (5%) of the market value at time and point of severance.

(B) (i) Biomass used primarily for the purpose of biofuel production is not subject to a severance tax.

(ii) As used in subdivision (10)(B)(i) of this section, "biomass" means any woody biomass that is grown for use in biofuels and is not grown for the production of other timber products.