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 2018. YEAR NEW/ ACQUIRED % GOOD TREND FACTOR TRENDED % GOOD 2018 100% 1.000 100% 2017 95% 1.000 95% 2016 90% 1.011 91% 2015 85% 1.001 85% 2014 79% 1.009 80% 2013 73% 1.021 75% 2012 68% 1.023 70% 2011 62% 1.050 65% 2010 55% 1.079 59% 2009 49% 1.064 52% 2008 43% 1.101 47% 2007 37% 1.151 43% 2006 31% 1.219 38% 2005 26% 1.280 33% 2004 23% 1.389 32% 2003 and older 21% 1.438 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, 2017.