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Sales and use taxes can have a significant financial impact on drilling and completion cost centers at an oil and gas company.In times of falling prices, monitoring sales tax expenditures and vendor tax collection is especially important. Because laws are complex, and large outlays of sales tax can easily be incurred during drilling, completion and daily operations, opportunities to both avoid exposure and more often, to reduce over-payments of tax, abound. This article is intended to provide a high-level overview of how these taxes typically affect producers in states with substantial oil and gas activity. Note that the states listed below are included in order of their rankings for production of oil and gas.