First Purchaser > FP Company Maintenance > FP Severance Tax

Allocated Flat Amount

•When using the Allocated Flat Amount on the General tab, enter in the Flat Dollar Amount (Typically WV Severance Tax uses this for tax credits).

•The Allocated Flat amount is to be used to issue a severance tax credit.

•The purpose is to calculate the full amount of the severance tax due with the first sequence and issue a credit with the second sequence. This can be used for any state.

•Required set-up: The severance tax code must contain at least 2 sequences.

oSequence 1: Must contain a valid tax to calculate during the Rev/Bill cycle.

oSequence 2: Should contain a credit in the form of a flat amount (for example 50.00-) This credit will reduce the amount of tax calculated in Sequence 1 by the flat amount entered. If more than 1 property uses this Severance Tax Code each property is subject to the full amount of the credit. (50.00- for each property so a total of 100.00-)

oThe amount to be credited in sequence 2 cannot be greater than the full amount of tax calculated in sequence 1. If the credit in sequence 2 is greater than the severance tax calculated in sequence 1, the system will not issue the difference as a credit. Instead, the system will calculate zero taxes.

•The cycle Update/Post process will include the number of wells when using the 2nd Tier Rate on the Special Options tab.

oThe sequence that the severance taxes are defined determines what is included in the basis of the allocation. If a type of severance tax shouldn’t be in the basis of the allocation, then assign it a sequence number that is greater than the Basis: Severance Record.

oIf a credit tax is being issued with this sequence, it will be limited to the basis amount.

oThe system will limit each allocation group to a single amount for this cycle. The allocation group is made up of the Property Master, State Code and Acquisition Code.

Allocated Flat Amount Option

Allocated Flat Amount Option