(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 2015.

�

YEAR NEW/ ACQUIRED	% GOOD	TREND FACTOR	TRENDED % GOOD
2015	100%	1.000	100%
2014	95%	1.000	95%
2013	90%	1.009	91%
2012	85%	1.010	86%
2011	79%	1.038	82%
2010	73%	1.066	78%
2009	68%	1.051	71%
2008	62%	1.088	67%
2007	55%	1.137	63%
2006	49%	1.204	59%
2005	43%	1.265	54%
2004	37%	1.372	51%
2003	31%	1.420	44%
2002	26%	1.449	38%
2001	23%	1.457	34%
2000 and older	21%	1.471	31%

�

(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, 2014.