Oil and Gas Price Escalation Factors for Tax Year 2023 per Property Tax
Code, Section 23.175
P&A has finalized the Section 23.175 calculation required to derive the oil and
gas price escalation scenarios for the 2023 tax year.
The EIA’s price projections which form the basis of our Price Adjustment Factor
calculations can be found at either https://www.eia.gov/outlooks/aeo/ or
https://www.eia.gov/outlooks/steo/ depending on whether the AEO (Annual Energy
Outlook) or STEO (Short-Term Energy Outlook) is applicable for the current tax
For 2023, the January STEO is the applicable EIA report.
The price escalatory factors for years 2-6 in our discounted cashflow appraisals
are calculated with reference to Producer Price Index (PPI) Commodity Data
information which can be found at https://data.bls.gov/cgi-bin/srgate Please
search for series ID WPU0561 (for oil) or WPU0531 (for natural gas).
In addition, see how these factors produce P&A's reference price forecasts for
oil and gas, with a comparison to the previous tax year's oil and gas price
Please note, the oil and gas price forecasts for the current tax year may or may
not be similar to those used for the previous tax year, for both oil and gas.
However, it should be noted that the valuation of mineral interests depends on
more than price alone. Forecasts of oil and gas production and expense levels as
of January 1 also figure prominently into the calculations. Expense levels tend
to follow price movement in a lagging (less volatile) fashion, while production
tends to decline over time as a natural result of changing reservoir conditions
(pressure loss, recovery percentage, etc.). Therefore, a price difference by
itself does not fully indicate how current valuations will compare with
valuations performed for any previous tax year.
As always, we welcome any thoughts or suggestions you have regarding our
appraisal work, etc. We are here to serve the taxpayers in the most efficient,
timely and fair manner possible.
Business Personal Property
Per Chapter 22 of the Texas Property Tax Code, all tangible taxable personal
property used for the production of income (i.e., business personal property, or
BPP) that a company owns or manages and controls as a fiduciary on January 1
must be “rendered” for taxation. A property tax rendition is simply a listing of
information about property that you own, such as description, location,
historical or acquisition cost, and age of each item. This is a legally
confidential document, not subject to Open Records requests, that appraisal
districts need and use in their discovery and appraisal procedures so that all
tangible taxable personal property is appraised fairly, efficiently, and as
accurately as possible.
BPP acquires taxable situs in a taxing unit (county, school, hospital district, etc.) when:
a) located in the unit on
January 1 for more than a temporary period;
b) normally located in the unit, even though it is outside the unit on January 1, if it is outside the unit
c) normally returned to the unit between uses elsewhere and is not located in any one place for more than a
temporary period; or
d) the owner resides (for property not used for business purposes) or maintains the owner’s principal place
of business in this state
(for property used for business purposes) in the unit
and the property is taxable in this state but does not have a taxable
situs pursuant to any of the first three provisions above.
BPP renditions in Texas are due on April 15, with the following exceptions:
• A 30-day extension to
May 15 is automatically available upon request to the chief appraiser.
• The deadline for rendering property regulated by the PUC, RRC, FERC, or STB is April 30, although a
15-day extension to May 15
is automatically available upon request to the chief
• In both cases above, another 15-day extension to May 30 can be granted by the chief appraiser if the
owner shows “good cause”
(intended to be a high hurdle for the owner to prove).
PLEASE NOTE: Per Property Tax Code Sec. 22.01(i), a property owner whose
property is being appraised by a third-party vendor retained by the appraisal
district (like Pritchard & Abbott!) can choose, in lieu of renditions, to
provide information substantially equivalent to that required to be on a
rendition directly to the third-party appraisal company. We highly encourage
property owners to take advantage of this option when available, as it greatly
helps us perform more accurate and complete appraisals prior to mailing the
Notices of Appraised Value. Otherwise, we must wait for our appraisal district
clients to forward us renditions.
All these deadlines apply equally to renditions or 22.01(h) or (i) property reports
provided to either appraisal districts or their contracted appraisal firms in lieu
All the deadlines discussed above
apply equally to renditions or 22.01(h) or (i) property reports provided to
either appraisal districts or their contracted appraisal firms in lieu of
Each year the comptroller and each chief appraiser shall publicize in a manner
reasonably designed to notify all property owners the requirements of the law
relating to filing rendition statements and property reports and of the
availability of forms. A person required to render property or to file a report
as provided by this chapter shall use a form that substantially complies with
the appropriate form
prescribed or approved by the comptroller.
Appraisal districts are not obligated to mail rendition forms to property
owners, although many do only as a courtesy. Property owners can find and print
approved rendition forms directly from the Comptroller’s website:
Which form to use depends on the type of property being rendered. Each form
requires a property owner to furnish the information necessary to identify the
property and to determine its ownership, taxability, and situs. A property owner
can (but is not required to) furnish additional information on the form,
including a good faith estimate of value. A tax agent (but not the property
owner) is required to swear that the information provided in the rendition is
true and accurate to the best of their knowledge and belief.
Substantial tax penalties can accrue for failure to timely file a rendition or
if the property owner or agent is found to have committed fraudulent conduct in
an inspection, determination, or other proceeding before the appraisal district.
More information is available in the Texas Property Tax Code, Chapter 22
(Renditions and Other Reports), such as what persons and which property is
covered by this business personal property rendition law.
New Economic Obsolescence Appraisal
Policy for Pipelines