Through December 31, 2005, operators who clean water produced from oil-and gas drilling and production, crude-oil refining, and natural-gas processing can apply to the department for an income tax credit of $1,000 per acre foot of clean water. The state limits the credit to $400,000 per operator annually. The operator must first deliver and transfer title to the clean water to the Interstate Stream Commission at the Pecos River. The credit is for corporate and personal income tax. State and federal water quality laws apply.
Complete RPD-41221, Credit for Produced Water Claim Form. Attach it to your PIT-1 form with schedule PIT-ADJ.
Also attach the copy of the Interstate Stream Commissions confirmation of receipt of the water.
A married couple filing separate returns may each claim half the amount allowed on a joint return. You may carry the unused credit forward for three years.
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