N.D.C.C. § 57-51-04 — Equipment used in production exempt from ad valorem tax

No equipment, material, or property is exempt from the payment of ad valorem tax by
reason of the payment of the gross production tax as herein provided except such equipment,
machinery, tools, material, or property as is actually necessary and being used at the site of a
producing well in the production of oil or gas; and it is expressly declared that no ice plants,
hospitals, office buildings, garages, residences, gasoline extraction or absorption plants, water
systems, fuel systems, roominghouses, and other buildings, nor any equipment or material used
in connection therewith is exempt from ad valorem tax, nor are drilling rigs exempt. The real
property is not exempt under this chapter except to the extent of the mineral interests therein.
57-51-05. Payment of tax on monthly basis - When tax due - When delinquent -
Payment by purchaser - By producer - How casinghead gas taxed - Exemptions.
1. The gross production tax on oil or gas must be paid on a monthly basis. The tax on oil
is due and payable on the twenty -fifth day of the month succeeding the month of
production. The tax on gas is due and payable on the fifteenth day of the second
month succeeding the month of production. If the tax is not paid as required by this
section, it becomes delinquent and must be collected as provided in this chapter. The
penalty does not apply if ninety percent of the tax due has been paid with the monthly
return and the taxpayer files an amended monthly return and pays the total tax due
within sixty days from the original due date. The commissioner, upon request and a
proper showing of the necessity for an extension, may grant an extension of time, not
to exceed fifteen days, for paying the tax and when the request is granted the tax is
not delinquent until the extended period has expired. Any taxpayer who requests and
is granted an extension of time for filing a return shall pay, with the tax, interest at the
rate of twelve percent per annum from the date the tax was due to the date the tax is
paid.
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2. On oil or gas produced and sold, the gross production tax must be paid by the
purchaser, and the purchaser is authorized to deduct in making settlement with the
producer or royalty owner, the amount of tax paid; provided, in the event oil produced
is not sold but is retained by the producer, the tax on the oil not sold must be paid by
the producer, including the tax due on royalty oil not sold; provided further, that in
settlement with the royalty owner the producer has the right to deduct the amount of
the tax paid on royalty oil or to deduct therefrom royalty oil equivalent in value at the
time the tax becomes due with the amount of the tax paid.
3. Gas when produced and utilized in any manner must be considered for the purpose of
this chapter, as to the amount utilized, as gas actually produced and saved , except
gas:
a. Used for fuel or otherwise used in the operation of any lease or premises in the
drilling for or production of oil or gas from the lease or premises, including
repressuring on the lease or premises; and
b. Produced from an enhanced oil recovery project utilizing the injection of gas,
either alone or in combination with other fluids, for the purpose of testing the
feasibility of enhanced oil recovery operations on a temporary basis for one or
more spacing units or employing enhanced oil recovery operations for an
extended or indefinite period of time on a fieldwide basis through unitization of the
reservoir that produces oil and gas. The exemption under this subdivision applies
to all enhanced oil recovery projects created and established by the industrial
commission after June 30, 2025, and for any gas produced after the date of first
production following initial injection of gas until all gas injected as part of the
enhanced oil recovery project has been recovered from the reservoir being tested
or unitized.
4. All calculations of the gross production tax on oil or gas, including production,
distribution, and claims for credit or refund, are based on the month of production and
must be credited to that month.