Oklahoma Income Tax Lease bonus depletion

How are lease bonuses treated under Oklahoma Income Tax? Are they subject to depletion allowance? If so, what is the rate?

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Our CPA treats lease bonuses as ordinary income with the IRS./State. No depletion allowance.

Oklahoma has allowed 22% depletion on both royalty and lease bonus. I do not know if that has recently changed. You should be able to find income tax information on Oklahoma website.


Looks like you’re right Tennis Daze.

From the OK. Tax Commission website:

“Oklahoma depletion on oil and gas well production, at the option of the taxpayer, may be computed at 22% of gross income derived from each Oklahoma property during the taxable year. Major oil companies, as de ned in Title 52 OS Sec. 288.2, when computing Oklahoma deple- tion, shall be limited to 50% of the net income (computed without the allowance for depletion) from each property. If Oklahoma options are exercised, the federal depletion not used due to 65% limit may not be carried over. Lease bonus received is considered income subject to depletion. If depletion is claimed on a lease bonus and no income is received as a result of non-producing properties, upon expiration of the lease, such depletion must be restored. A complete schedule by property must be furnished.”

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