Customization of Texas Severance Tax EDI File Creation

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Customization of Texas Severance Tax EDI file creation with recent file format changes by the Texas State Government

 

States most often tax the value of produced oil and gas. Value taxes can be difficult to implement because states must closely monitor gas and oil sales to determine the current market value. Further, because prices are prone to fluctuation, value taxes can make state revenue predictions difficult. Texas and Wyoming tax the assessed oil and gas value with reduced rates and exemptions to incentivize production from certain well types.

Texas State Government upgraded the Tax EDI software to 4.2, effective April 2019. As result of this, the text file that the First Purchasers upload to the Texas State website needs to include additional details that match with the EDI format of Texas State Tax website.

The following are the high-level format changes that the Texas State Government made.

                                        Transaction Set 813

Changes provided in Texas Tax Portal




Custom Solution for Texas Tax EDI file generation with the required format changes.

The report can be generated from SAP in Transaction code: O3UX3_WORKPLACE (Program: SAPLOIUX3_WORKPLACE)

In this article, it is explained how to customize program RUIUX3_TX1 to implement changes in Texas Tax EDI Report that are required by the Texas State Government.

• Step # 1: Copy tax report program ‘ROIUX3_TX1’ and create a custom program ‘ZROIUX3_TX1’

• Step # 2: Make changes to the custom program to implement the required format

• Step # 3: Create a custom table to maintain the Project Numbers for ‘Type 5’ exempted leases. This table will be called from the program to populate project numbers relevant for ‘Type 5’ exempted lease.

The custom table is called from Function Module ‘ZOIUX3_TX_EDI_813_REF’ which is copy of ‘LZFGOIU_X3U04’

• Step # 4: Copy Function Group ‘FGOIU_X3’ to and create customized Function Group ‘ZFGOIU_X3’

Following highlighted is the Function Library that is included in the above Function Group.



Following are the customized Function Modules for Function Library ‘LZFGOIU_X3UXX’



Changes that are implemented in some of the above Function Modules is shown in the following screen shots.

ZOIUX3_TX_EDI_813_RPOSM



Function module ‘ZOIUX3_TX_EDI_813_RPOSM’ is called from program ‘ZROIUX3_TX1’



Insert following changes in the custom program (ZROUIX3_TX1) above:

Texas Crude Oil Monthly Purchaser Report Changes

1. Create new exempt types – Combo 5/11 (Functional Change)
   
   
   
   1. Create new Tax Classes
   
   
   
   

1. Combo 5/11 25% (17) – valuation rate 0.01725


2. Combo 5/11 50% (18) – valuation rate 0.0115

• Combo 5/11 100% (19) – valuation rate 0.0

1. 
   
   
   
   1. Assign new tax classes to new Exempt types
   
   
   
   


2. Create Z-Table – Project Number Mapping (Technical Change)

1. Key – Lease Number (LEASE_NUMBER (Char 7)


2. Project Number (Alpha Character Char 9)

• Allow entries to be added, changed and deleted

1. Detail (Technical Change)
   
   
   
   1. For exempt types 5, 14, or Combo 5/11(17, 18, 19) create entry for project number – ONLY CREATE IF EXEMPT TYPE 05, 14, 17,18, 19)
   
   
   
   

1. Read Z-Table using lease number to retrieve project number.


2. Entry needs to be after REF~PN~# (1 or 2)

• Formatted REF~PI~project number

1. 
   
   
   
   1. For exempt types 5, 14, or Combo 5/11(17, 18, 19) set exempt types
   
   
   
   

1. Formatted TIA~8065~~05 (Exempt Type 05) - Existing


2. Formatted TIA~8065~~14 (Exempt Type 14) - Existing

• Formatted TIA~8065~~05~11 (Exempt Type Combo 5/11 (17, 18, 19)) - New

1. 
   
   
   
   1. For exempt types 05, 14, or Combo 5/11 (17, 18, 19) create entry for the Reduced Tax Rate – ONLY CREATE IF EXEMPT TYPE 05, 14, 17,18, 19)
   
   
   
   

1. Read the table OIUVL_STTR (State Tax Rates) retrieve valuation rate (VAL_RATE)
   
   
   
   1. PRI_GEO_LOC = 42
   
   
   2. LAND1 = US
   
   
   3. SEVT_TAC_TY = PR
   
   
   4. MAJPD_CD = 1
   
   
   5. TAX_CLASS = EXEMPTION_TYPE (OIUX3_TX_RPODT)
   
   
   
   


2. Entry needs to be after TIA~8200

• Formatted - TIA~8657~~~~VAL_RATE.

1. 
   
   
   
   1. For exempt types 05, 14, or Combo 5/11 (17, 18, 19) create entry for Tax Due – ONLY CREATE IF EXEMPT TYPE 05, 14, 17,18, 19)
   
   
   
   

1. Entry needs to be after TIA~8657


2. The tax due is the field ST_TAX_AMT_DUE (OIUX3_TX_RPODT)

• FILING_PEIOD (OIUX3_TX_RPODT) equals filling period selected or RUN_ID (OIUX3_TX_RPODT) equals run ID selected

1. Formatted TIA~8658~ST_TAX_AMT_DUE

1. Summary (Technical Change)
   
   
   
   1. For exempt types 05, 14, or Combo 5/11 (17, 18, 19) create entry for Total Tax Due - Required
   
   
   
   

1. Total ST_TAX_AMT_DUE (OIUX3_TX_RPODT) for all EXEMPTION_TYPE (OIUX3_TX_RPODT)


2. FILING_PEIOD (OIUX3_TX_RPODT) equals filling period selected or RUN_ID (OIUX3_TX_RPODT) equals run ID selected

• TAXPAYER_NUMBER (OIUX3_TX_RPODT) equals taxpayer number

1. Entry needs to be after TIA~8110


2. Formatted TIA~8658~total ST_TAX_AMT_DUE

With the implementation of above changes, amount in different rows of the report populates as explained below.

TIA~8511 ==> Net Taxable Volume from lease detail supplements ==> Total of (OIUX3_TX_RPODT-TAX_VOL) or Difference between OIUX3_TX_RPODT- GROSS_VOL and OIUX3_TX_RPODT- EXEMPT_VOL (Gross Volume minus and Exempt Volume). This is the Total of all barrels in all TIA~8100 code from details (TIA~8100 = TIA~8050 - TIA~8066)

TIA~8512 ==> Net Taxable Value from lease detail supplements ==> Total of [(OIUX3_TX_RPODT-TAX_VAL) subtracted by (OIUX3_TX_RPODT-TAX_VAL where OIUX3_TX_RPODT-EXEMPTION_TYPE =”05” and OIUX3_TX_RPODT-TAX_VAL where OIUX3_TX_RPODT-EXEMPTION_TYPE =”03”)]. This is the total of all amounts in all TIA~8200 from details except the amounts of Type 5 and 14 exempted leases. [(TIA~8200 = TIA~8055 - TIA~8063 - TIA~8615)-Gross Value of ‘Type 5’ and ‘Type 14’ Exemption Leases for the Reporting period.

Note: Ignoring Type 3 doesn’t make any difference because tax value of exemption type 3 lease is always zero.

TIA~8230 ==> Total Gross Taxable Barrels à it is the sum of TIA~8511 and TIA~8059 à so always TIA~8230 will be equal to TIA~8511 because TIA~8059 is set to zero.

TIA~8511 ==> Total of Net Taxable Barrels à it will always be same as TIA~8230

TIA~8059 ==> Total of Statewide Barrels  à it is always set to zero (in the program)

TIA~8650 ==> Total net taxable value à same as to TIA~8512

TIA~8655 ==> Regulatory Tax Due à number on TIA~8230 multiplied by 0.00625

TIA~8110 ==> Gross Production Tax Due à Total of [(OIUX3_TX_RPODT- ST_TAX_AMT_DUE) subtracted by (OIUX3_TX_RPODT- ST_TAX_AMT_DUE where OIUX3_TX_RPODT-EXEMPTION_TYPE =”05” and OIUX3_TX_RPODT- ST_TAX_AMT_DUE where OIUX3_TX_RPODT-EXEMPTION_TYPE =”14”)].

Note: Ignoring Type 3 doesn’t make any difference because tax due on exemption type 3 lease is always zero.

Note: There is no amount (code) in the details that match the total tax due in the summary.

TIA~8658 ==> Total tax on Type 5 and/or 14 Leases à Total (OIUX3_TX_RPODT- ST_TAX_AMT_DUE) where OIUX3_TX_RPODT-EXEMPTION_TYPE =”05”. In other words, there is TIA~8658 code (row) in details (under TFS~T2~36100) also. To report an amount in TIA~8658 at summary level, we can add all amounts in 8658 from details level. This is the total of all amounts in all TIA~8658 in details. (And TIA~8658 from details = TIA~8200*.023). This code is only for Type 5 and/or 14 exempted leases.

TIA~8600 ==> Total Tax & Fee Due ==> Amount equal to (TIA~8655 + TIA~8110 + TIA~8658) froam the summary.

 

With the implementation of the program changes, as per the guidelines shown in the screen shots posted in this article, and by populating the amounts based on the explanation for the TIA codes, Production Tax output file generated in SAP Transaction code: O3UX3_WORKPLACE, matches with the format required by the Texas State Government.