Court Opinion

ID: 9857023
Source: CourtListenerOpinion
Date Created: 2023-09-24 07:12:06.453971+00
Date Added: 2024-06-11T09:37:51.359116
License: Public Domain

ANDREWS, Special Justice
(dissenting).
This is a production tax. It is not a production and transportation tax. Its “in lieu” effect exempts production facilities from ad valorem taxation. It does not exempt transportation facilities. The gross value of the production must be determined before the value thereof is increased by transportation.
In case oil, gas or casinghead gas is sold under circumstances where the sale price does not represent the cash price thereof, the Tax Commission is authorized to require the tax to be paid upon the basis of the prevailing price in the field. However, for convenience in administration the Commission would like to ignore the actual sale price under all circumstances. Such practice is not in compliance with 68 O.S. 1951 § 833.
A sale under circumstances indicating the absence of armslength bargaining justifies the application of the prevailing field price. But when a bona fide sale of the production has occurred, the sale price should be accepted as the proper measure of value.
The best means of determining value is by a bona fide sale. There is no claim that the price paid for the production at the wellhead was the result of collusion. It established the actual value of the production. The gross production tax should be based upon such sale price.
I therefore respectfully dissent to the opinion promulgated by the majority of my associates.
I am authorized to say that DAVISON, HALLEY and JACKSON, JJ., concur in these dissenting views.