Saving Big by Stopping Sales Tax Overpayments

This major exploration and production company is focused on assets in the Permian Basin.

Challenge:

The client had unwittingly been overpaying sales tax to dozens of vendors for years.

Merit Solution:

  • Merit Advisors’ sales and use tax team analyzed the client’s vendor contracts, identifying more than 100 opportunities for direct pay exemptions.
  • Most of those vendors had erroneously been charging our client the highest Texas sales tax rate.
  • Merit also reviewed the client’s transactions for the previous two-year period.

Result:

  • In addition to issuing direct pay certificates, Merit secured over $300,000 in tax credits for sales tax paid in error on the purchase of exempt well services and equipment over the previous two years.
  • Merit also provided strategic advice on the tax implications of such large purchases in the future.
Male worker inspection at steel long pipes and pipe elbow in station oil factory during refinery valve of visual check record pipeline tank oil and gas industry

$1.4M

sales & use tax savings

Rewards of Merit

Explore our case studies to see how Merit helps energy companies unlock trapped value.

Wiping Out Tax Liabilities for Non-Op Interests

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Case Study

This operator engaged Merit to minimize property tax liabilities for its mineral holdings by reducing the working interest values.

Fixing a Mineral Interest Mistake to Secure Big Savings

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Case Study

This large operator turned to Merit after a state Tax Commission error resulted in an unfair valuation.

Reducing Inflated Assessments the Competition Overlooked

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Case Study

Unhappy with its prior tax consultant, this petrochemical facility wanted a partner who could reduce its ad valorem assessments.