Two numbers that quietly shrink a royalty check — the state severance tax and the post-production costs an operator can deduct before paying you. This first-party dataset puts both side by side for the major U.S. producing states, with the leading court decision behind each state's deduction rule.
Data as of June 29, 2026 · CSV · JSON · License CC BY 4.0
Get a Free OfferTL;DR State-by-state oil & gas severance/production tax rates plus the post-production deduction rule each state follows — at-the-well vs. marketable-product — with the leading court case. First-party reference dataset with CSV/JSON exports, CC BY 4.0.
Your gross royalty is rarely what lands in your account. Two deductions come first: the state severance (production) tax, and post-production costs — gathering, compression, processing, dehydration, and transportation the operator may net out before calculating royalty. Whether those post-production costs can be deducted at all depends on which legal rule your state follows. This table compiles both, by state.
The two deduction rules in plain English
At-the-well states let operators deduct post-production costs from royalty unless your lease says otherwise — so lease language is everything. Marketable-product states make the operator bear the cost of getting the product to a marketable condition first, which limits what can be deducted. A few states are unsettled / lease-dependent, where the lease wording controls.
Severance rates are simplified headline statutory rates — they exclude stripper/low-volume exemptions, new-well incentives, conservation fees, and local ad valorem (property) tax. The deduction column is a general summary of the leading doctrine, not legal advice.
Post-production deductions can dwarf severance tax. In an at-the-well state, gathering and processing deductions can take a double-digit percentage off gross gas royalty — often more than the severance tax itself — depending entirely on your lease.
Your lease can override the default rule. Even in an at-the-well state, a strong "no deductions" or "cost-free royalty" clause can protect you; even in a marketable-product state, lease language can permit some downstream deductions. Read the royalty clause.
It changes what a buyer underwrites. When we value an interest, the deduction regime and your specific lease are part of the math — which is why two interests with the same gross production can be worth different amounts.
Severance/production tax figures are compiled from published state tax statutes and agency rate schedules; they are simplified headline rates and exclude exemptions, incentives, conservation fees, and local ad valorem tax. The post-production column summarizes the leading reported appellate decision in each state (e.g., Heritage Resources in Texas, Rogers v. Westerman Farm in Colorado, Estate of Tawney in West Virginia, Piney Woods for Mississippi). It is a general, simplified summary, not tax or legal advice — rates and case law change, and your own lease can change the result. Verify current rates with the state agency and consult a qualified attorney or CPA. When citing, attribute "Buckhead Energy" and include the as-of date (June 29, 2026).
Machine-readable exports: CSV and JSON, published under a Creative Commons Attribution 4.0 license.
When Buckhead Energy makes an offer, we factor your state's severance tax and deduction regime and your actual lease into the valuation — and explain the math. Get a free, no-obligation written offer.
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This page is educational and is not tax or legal advice. Severance tax rates and post-production case law change and are simplified here; verify current rates with the state agency and consult a qualified attorney or CPA for your specific lease and situation.
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