Collection of tax; duties of producer, operator, and purchaser.

(1)(a) The tax levied under this part is imposed upon the producer of the taxable product in proportion to the producer’s ownership of the taxable product at the time of severance. The tax shall constitute a first lien on production until paid, whether or not the taxable product is in possession of the producer or any purchaser.

(b) Except as otherwise provided by law, the operator shall collect the tax by deducting the proportionate amount of tax due from amounts due each producer and withholding the tax so deducted from any payments made to producers. Any operator who sells taxable products on the open market, or who uses or disposes of them in any manner, except in lease operations on the lease where produced, shall deduct the amount of tax imposed under this part from any amounts due interest owners and withhold the tax so deducted from any payments made to the interest owners.

(c) When taxable products are sold under contracts requiring the purchaser to pay the owners of the taxable products directly, the operator shall not be required to deduct the tax. In this event, the purchaser shall collect the tax by deducting it from the amount due the owners and withholding it from payments made to each of the owners. Nothing in this paragraph shall release the operator from any record-keeping or reporting requirements imposed under this part.

(2)(a) The person required by this section to deduct and withhold the tax imposed under this part shall make remittance of the tax to the department, as provided in this part.

(b) Any person who fails to deduct, withhold, or remit the tax as required by this part is liable for payment of the full amount of tax, and the department shall proceed to collect the tax, together with any interest or penalties, from such person as if such person were the producer.

(c) When the title to any taxable product is in dispute or whenever any payments are being withheld on account of litigation or other reason, the amount of tax imposed by this part shall be deducted, withheld, and remitted to the department, as required by this section.