The state of Texas has multiple tax incentives that help to keep their economy growing. One is a severance tax. The Texas severance tax was made to provide relief for marginal wells of oil and gas produces. The tax relief kicks in if the prices for oil and gas fall to a certain point. Through a complex scheme of tax reduction, using prices, earnings and averages, the relief allows the company to continue operation of their well while still earning profits. It was created as temporary in 2005, and was then made permanent by Texas legislature before it's termination date in 2007.