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 2017. YEAR NEW/ ACQUIRED % GOOD TREND FACTOR TRENDED % GOOD 2017 100% 1.000 100% 2016 95% 1.000 95% 2015 90% 0.988 89% 2014 85% 0.996 85% 2013 79% 1.008 80% 2012 73% 1.009 74% 2011 68% 1.037 70% 2010 62% 1.065 66% 2009 55% 1.050 58% 2008 49% 1.087 53% 2007 43% 1.136 49% 2006 37% 1.203 45% 2005 31% 1.264 39% 2004 26% 1.371 36% 2003 23% 1.419 33% 2002 and older 21% 1.447 30% (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, 2016.