Wyoming Addresses Taxability of Tools Lost Down Holes

Wednesday, April 23rd, 2014


The Wyoming Department of Revenue recently issued a policy statement about the taxability of tools lost down holes during oil and gas field services.

Wyoming taxes oil and gas field services. Generally, services performed as part of the pre-production casing phase are not subject to tax. Services performed as part of the production casing phase are subject to tax. Historically, when the service provider lost a tool down a hole and required the customer to pay for the tool, Wyoming viewed this as a sale of tangible personal property and thus subject to tax.

Now, however, the taxability of charges for lost tools will depend on which phase the tools are lost in. Charges for tools lost down holes during the pre-production casing phase will not be subject to tax. Charges for tools lost down holes during the production casing phase will be subject to tax as part of taxable services.


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