La. R.S. 47:647 — Severance tax credit, priority

A.(1) Every taxpayer liable for and remitting taxes levied and collected pursuant to R.S. 47:1301 through R.S. 47:1307 and each taxpayer who bears such taxes as a direct result of contractual terms or agreements applied in disregard of R.S. 47:1303(C), shall be allowed a direct tax credit, at any time following payment of such tax, but, not in excess of the amount which must be borne by such taxpayer, against severance taxes owed by such taxpayer to the state, the amount of which credit shall not exceed the amount of severance taxes for which such taxpayer is liable to the state as a direct consequence of the privilege of severing natural resources from the surface of the soil or water of the state. A taxpayer who bears any portion of the tax levied pursuant to R.S. 47:1301 through R.S. 47:1307 as a direct result of contractual terms or agreements applied in disregard of R.S. 47:1303(C), shall be entitled to a credit under this Section only after there has been a determination by the Louisiana Supreme Court or the appropriate United States District Court that such taxpayer must bear the tax, provided that if the taxpayer or the state has sought and been denied a preliminary injunction enjoining the application of such contractual terms or agreements sought to be rendered inapplicable by R.S. 47:1303(C), then such taxpayer shall be entitled to a credit under this Section from the date of denial of the preliminary injunction. In the event that this Section is declared invalid as to tax credit authorized hereunder, such invalidity shall be prospective only.
(2) The tax credit provided in Paragraph (1) of this Subsection shall be allowed in the following manner: The credit shall be applied first against any severance tax owed on oil as provided in R.S. 47:633(7). If there is any credit remaining that the taxpayer may still apply against severance taxes after applying it against oil, the balance shall then be applied against any severance tax owed on distillate, condensate, or similar natural resources as provided in R.S. 47:633(8)(a). Any balance of credits then remaining which the taxpayer may apply against severance taxes owed, shall be applied against natural gasoline, casinghead gasoline, and other natural gas liquids, ethane, or methane recovered through processing gas after separation of oil, distillate, condensate, or similar natural resources as provided in R.S. 47:633(8)(b). If there remain any tax credits that may be applied against severance taxes owed by the taxpayer, he may then apply them against severance taxes owed on sulphur as provided in R.S. 47:633(10). If there remain any tax credits thereafter that may be applied against severance taxes owed by the taxpayer, he may then apply them against severance taxes owed on gas as provided in R.S. 47:633(9); provided however, that such credits which may be applied against severance taxes owed on gas shall not be allowed until after March 31, 1982.
B. No tax credit pursuant to this Section shall be allowed for any taxes remitted pursuant to R.S. 47:1301 through 1307 for which a taxpayer has an enforceable right to reimbursement from a third party. A taxpayer claiming any credit under this Section shall furnish to the secretary of the Department of Revenue all applicable contracts and other information requested by the secretary, which relate to such taxpayer's possible right to reimbursement. If the secretary determines that the taxpayer has an enforceable right to reimbursement, which the taxpayer is not actually receiving, the secretary shall so rule. Within thirty days of receipt of notice of such ruling the taxpayer shall have the right to appeal such ruling to the Louisiana Board of Tax Appeals which board shall determine in open meeting whether there is sufficient evidence to support the ruling of the secretary. If the board determines that there is not sufficient evidence it shall overrule the secretary and the taxpayer shall not be required to take any other action in order to receive the tax credit provided by this Section. If the board determines that there is sufficient evidence, the taxpayer shall thereafter have a period of ninety days within which to institute any administrative or judicial proceedings necessary to assert such right to reimbursement. The taxpayer shall pursue such administrative or judicial proceedings with due diligence. At all times prior to commencement of such administrative or judicial proceedings and during the pendency thereof, and during any appeals therefrom, the taxpayer shall continue to be entitled to the credit provided in this Section; provided that if no action is taken by the taxpayer to assert the right to reimbursement within ninety days no further credit shall be granted and the state shall have the right to recover from the taxpayer any credits granted prior to the expiration of such time. If it is determined in any administrative proceedings that a taxpayer has no right to such reimbursement, then the taxpayer shall not be entitled to continue receiving the credit allowed by this Section, unless the taxpayer within the time allowed by applicable law seeks judicial review of such administrative determination and pursues such judicial review to a final and unappealable judgment. If the administrative or judicial determination establishes that the taxpayer has an enforceable right to reimbursement of the taxes levied pursuant to R.S. 47:1301 through 1307, and if the taxpayer is so reimbursed, then such taxpayer shall be liable to the state for additional severance taxes equivalent to the amount of taxes levied under R.S. 47:1301 through 1307 for which such taxpayer has received reimbursement. The taxpayer shall also pay to the state interest on such taxes at the rate prescribed in R.S. 47:1601, accruing from the date on which the credit attributable to such taxes was taken to the date of final payment but only to the extent of any interest which the taxpayer has itself received on the amount of reimbursement.
C. The credit allowed by this Section shall not affect the percentage allocation of severance tax proceeds otherwise due to any parish, and the secretary of the Department of Revenue, with the concurrence of the state treasurer shall, by regulation, establish such procedures as may be deemed necessary to provide therefor.
D. The secretary of the Department of Revenue shall promulgate rules and regulations necessary for the implementation and administration of the tax credit provided for herein.