Allocated Flat Amount

• When using the Allocated Flat Amount on the General tab, enter the Flat Dollar Amount (Typically, WV Severance Tax uses this for tax credits).
• The Allocated Flat amount will be used to issue a severance tax credit.
• The purpose is to calculate the full amount of the severance tax due with the first sequence and issue a credit with the second sequence. This can be used for any state.
• Required set-up: The severance tax code must contain at least 2 sequences.
  • Sequence 1: Must contain a valid tax to calculate during the Rev/Bill cycle.
  • Sequence 2: Should contain a credit in the form of a flat amount (for example, 50.00-). This credit will reduce the amount of tax calculated in Sequence 1 by the flat amount entered. If more than 1 property uses this Severance Tax Code, each property is subject to the full amount of the credit.  (50.00- for each property, so a total of 100.00-)
  • The amount credited in sequence 2 cannot be greater than the full tax calculated in sequence 1. If the credit in sequence 2 exceeds the severance tax calculated in sequence 1, the system will not issue the difference as a credit. Instead, the system will calculate zero taxes.
• The cycle Update/Post process will include the number of wells when using the 2nd Tier Rate on the Special Options tab.
  • The sequence in which the severance taxes are defined determines what is included in the basis of the allocation.  If a type of severance tax shouldn’t be in the basis of the allocation, then assign it a sequence number greater than the Basis: Severance Record.
  • If a credit tax is being issued with this sequence, it will be limited to the basis amount.  
  • The system will limit each allocation group to a single amount for this cycle.  The allocation group is made up of the Property Master, State Code, and Acquisition Code.