The term Primary Product from Gas refers to all types of gas and associated hydrocarbon components extracted from gas wells or oil wells. This includes natural gas, condensates, liquefiable petroleum gases (such as ethane, propane, and butane), and liquid products like natural gasoline. These products can be recovered directly at the well site or through further processing.
This term is primarily used in tax law, particularly in the context of the Foreign Tax Credit under the Internal Revenue Code. It is relevant for businesses and individuals involved in the extraction and sale of gas and its derivatives. Understanding this term is crucial for ensuring compliance with tax regulations and for accurately reporting income derived from these sources.
Here are a couple of examples of abatement:
For instance, a company that extracts natural gas from its wells and sells it to consumers is dealing with primary products from gas. Another example is a refinery that processes crude oil to produce propane and butane, which are also classified as primary products from gas.
Pursuant to 26 CFR 1.907(c)-1(d)(5), the definition and scope of primary products from gas are outlined. This regulation is part of the broader tax code that governs income from sources outside the United States.
| State | Variation |
|---|---|
| Texas | Specific regulations on extraction and reporting of gas products. |
| Pennsylvania | Unique tax incentives for natural gas extraction. |
| California | Strict environmental regulations affecting gas extraction. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Difference |
|---|---|---|
| Natural Gas | A fossil fuel in gaseous form, primarily composed of methane. | Natural gas is a component of primary products from gas. |
| Condensate | A mixture of hydrocarbons that are in liquid form at surface conditions. | Condensate is included in the broader category of primary products from gas. |
If you are involved in the extraction or sale of gas products, ensure you understand how this term affects your tax obligations. You can explore US Legal Forms for templates that can assist you in compliance and reporting. For complex situations, consider consulting a legal professional to navigate the regulations effectively.
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They are all gas and hydrocarbon components extracted from gas or oil wells, including natural gas and liquefiable petroleum gases.