1. (a) On and after January 1, 2009, the severance tax rate levied on natural gas production is the following percent of market value of the natural gas severed within the State of Arkansas:

   1. (1) One and one-half percent (1.5%) on new discovery gas for the time period provided in 26 CAR § 167-106(b);
   2. (2) One and one-half percent (1.5%) on high-cost gas for the time periods provided in 26 CAR § 167-106(c);
   3. (3) One and one-quarter percent (1.25%) on marginal gas;
   4. (4) Five percent (5%) on all natural gas which is not defined as new discovery gas or marginal gas; and
   5. (5) Five percent (5%) on high-cost gas following the cost recovery period or periods found in 26 CAR § 167-106(c), as applicable.
2. (b) For each natural gas well, a producer shall pay the severance tax rate provided in subsection (a) of this section according to the well determination made by the Director of the Oil and Gas Commission in 26 CAR § 167-107(c) regardless of whether a well contains two (2) or more separately metered or commingled gas producing zones. Example: A producer completes a well in a tight gas formation and the well is certified by the Director of the Oil and Gas Commission as a high-cost gas well. The producer is permitted to pay the reduced severance tax rate provided in subdivision (a)(2) of this section for the thirty-six-month period provided in 26 CAR § 167-106(c)(1). In the same well, the producer is also able to obtain natural gas production in the same well but in a zone that does not qualify as high-cost gas. The severance tax rate for high-cost gas shall apply to the gas produced from the zone that does not qualify as high-cost gas. Once the well no longer is paying the reduced severance tax rate provided in subdivision (a)(2) of this section for the thirty-six-month period provided in 26 CAR § 167- 106(c)(1) (or allowable extension under 26 CAR § 167-106(c)(2)), the producer shall pay the severance tax rate provided in subdivisions (a)(3) or (a)(5) of this section, as applicable.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules provided as follows: "Source: Ark. Code Ann. § 26-58-111(5)."