ARM 42.21.138. OIL AND GAS FIELD MACHINERY AND EQUIPMENT

(1) Oil and gas field machinery and equipment shall be valued using the cost approach to market value. The taxpayer must provide to the department the acquired cost, the year acquired, and an itemized description of each piece of machinery and equipment. The acquired cost will be trended to current replacement cost and then depreciated according to the schedule mentioned in (2). (2) The department shall prepare a 15-year trended depreciation schedule for oil and gas field machinery and equipment. Trend factors and depreciation factors published in the Marshall & Swift Valuation Service Guide will be used to develop the trended depreciation schedules. The trend factors shall be the most recent available. (3) The trended depreciation schedule referred to in (1) and (2) is listed below and shall be used for tax year 2016. YEAR NEW/ ACQUIRED % GOOD TREND FACTOR TRENDED % GOOD 2016 100% 1.000 100% 2015 95% 1.000 95% 2014 90% 1.009 91% 2013 85% 1.021 87% 2012 79% 1.023 81% 2011 73% 1.051 77% 2010 68% 1.079 73% 2009 62% 1.064 66% 2008 55% 1.101 61% 2007 49% 1.151 56% 2006 43% 1.219 52% 2005 37% 1.281 47% 2004 31% 1.390 43% 2003 26% 1.438 37% 2002 23% 1.467 34% 2001 and older 21% 1.475 31% (4) All downhole equipment in oil and gas wells is exempt from taxation. Downhole equipment includes: (a) sucker rods; (b) tubing; (c) casing; and (d) submersible pumps. (5) Downhole equipment which is not in an oil or gas well as of the assessment date, January 1, each year shall be taxed as class eight property. (6) This rule is effective for tax years beginning after December 31, 2015.