(a) For oil and gas removed on or after July 1, 2013, there is hereby imposed a tax upon the severance and production of oil or gas from a well on a production unit in this State permitted, or required to be permitted, under the Illinois Hydraulic Fracturing Regulatory Act, for sale, transport, storage, profit, or commercial use. The tax shall be applied equally to all portions of the value of each barrel of oil severed and subject to such tax and to the value of the gas severed and subject to such tax. For a period of 24 months from the month in which oil or gas was first produced from the well, the rate of tax shall be 3% of the value of the oil or gas severed from the earth or water in this State. Thereafter, the rate of the tax shall be as follows:
         (1) For oil:

Terms Used In Illinois Compiled Statutes 35 ILCS 450/2-15

  • Month: means a calendar month, and the word "year" a calendar year unless otherwise expressed; and the word "year" alone, is equivalent to the expression "year of our Lord. See Illinois Compiled Statutes 5 ILCS 70/1.10
  • State: when applied to different parts of the United States, may be construed to include the District of Columbia and the several territories, and the words "United States" may be construed to include the said district and territories. See Illinois Compiled Statutes 5 ILCS 70/1.14

             (A) where the average daily production from the
        
well during the month is less than 25 barrels, 3% of the value of the oil severed from the earth or water;
            (B) where the average daily production from the
        
well during the month is 25 or more barrels but less than 50 barrels, 4% of the value of the oil severed from the earth or water;
            (C) where the average daily production from the
        
well during the month is 50 or more barrels but less than 100 barrels, 5% of the value of the oil severed from the earth or water; or
            (D) where the average daily production from the
        
well during the month is 100 or more barrels, 6% of the value of the oil severed from the earth or water.
        (2) For gas, 6% of the value of the gas severed from
    
the earth or water.
    If a well is required to be permitted under the Hydraulic Fracturing Regulatory Act, the tax imposed by this Section applies, whether or not a permit was obtained.
     (b) Oil produced from a well whose average daily production is 15 barrels or less for the 12-month period immediately preceding the production is exempt from the tax imposed by this Act.
     (c) For the purposes of the tax imposed by this Act the amount of oil produced shall be measured or determined, in the case of oil, by tank tables, without deduction for overage or losses in handling. Allowance for any reasonable and bona fide deduction for basic sediment and water, and for correction of temperature to 60 degrees Fahrenheit will be allowed. For the purposes of the tax imposed by this Act the amount of gas produced shall be measured or determined, by meter readings showing 100% of the full volume expressed in cubic feet at a standard base and flowing temperature of 60 degrees Fahrenheit, and at the absolute pressure at which the gas is sold and purchased. Correction shall be made for pressure according to Boyle's law, and used for specific gravity according to the gravity at which the gas is sold and purchased.
     (d) The following severance and production of gas shall be exempt from the tax imposed by this Act: gas injected into the earth for the purpose of lifting oil, recycling, or repressuring; gas used for fuel in connection with the operation and development for, or production of, oil or gas in the production unit where severed; and gas lawfully vented or flared; gas inadvertently lost on the production unit by reason of leaks, blowouts, or other accidental losses.
     (e) All oil and gas removed from the premises where severed is subject to the tax imposed by this Act unless exempt under the terms of this Act.
     (f) The liability for the tax accrues at the time the oil or gas is removed from the production unit.