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Local Impact Mitigation Tax

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A local impact mitigation tax is imposed at the rate of 5 cents per barrel of oil and 1/4 cent per mcf of gas produced within the state on or after January 1, 2026 and before January 1, 2029.

For details on how to file, please review the filing instructions.

General TAP Filing Instructions
Taxpayer Access Point (TAP)

Filing and Payment Frequency

Filing frequency: Quarterly

Filing due: The last day of the month following reporting period

Payment frequency: Quarterly

Payment due: The last day of the month following reporting period

Forms and Publications

File TC-687 on TAP
TC-687, not available online, must be filed electronically using Taxpayer Access Point

Statues and Rules

Revenue

Distributed to the county where the revenue was collected. The revenue may only be expended for transportation projects that mitigate the direct impacts of oil or gas production on qualifying roads located within the recipient county.

FAQ’s

What system will be used?
The producer will be able to file the return and make payment through the Taxpayer Access Point (TAP).

When will the operator be able to log into the system?
The system is currently being developed. The producer should be able to register for the new accounts starting on or around January 1, 2026.

When will the producer be able to provide information and/or make payment?
Once your account application is submitted and processed, you can file and pay your first quarterly return starting on April 1, 2026. This first payment, covering production from January 1, 2026, through March 31, 2026, will be due on or before April 30, 2026.

What information will the producer need to provide?
The following information will need to be provided for each well:

  • API number
  • Production type (oil/gas)
  • Production volumes
  • County where well is located
  • Volumes for the following exemptions:
    • Stripper wells
    • First six months for development wells
    • First 12 months for wildcat wells
    • Used during processing oil or gas to marketable condition

The rate will be applied to the taxable volumes calculated from the information that is provided by the producer.

What is the filing frequency and how will the return be filed?
This is a quarterly return and will be filed electronically through TAP.

What is the due date for the payment and return?
The return and payment are due on or before the last day of the month following each calendar quarter.

What is the Utah State Tax Code Reference?
The code for further clarification can be found in Title 59 Chapter 32

If there are questions/concerns who should be contacted?
Contact the Minerals Department at 801-297-3620