How do the advalorem taxes work in Kansas. for instance: if you produce a well for a short period of time in one year, say December 15th through December 31st, is that considered a year of production that you are not taxed on. It is my understanding that you are granted the 1st year, in which you are not taxed by the advelorem entity. Is this a calendar year or the 1st 365 days that you produce consider the 1st year of production?
Dear Mr. Davis,
I know nothing about Kansas taxing except what I just read through a google web search. It appears that real property is appraised as to value as of Dec 31st of each year. Ad valorem taxes are a tax on value, rather than income, so it really makes no difference as to how many days a well produced during the year, its value is set by the reserves and estimate of future product pricing.
Severance tax is based on production and Income Tax is based on dollars received.
Thanks for your help on this issue. It has helped us as we were trying to decide whether to produce this well in the balance of 2010, or wait until 2011...
Buddy Cotten said:
Dear Mr. Davis,
I know nothing about Kansas taxing except what I just read through a google web search. It appears that real property is appraised as to value as of Dec 31st of each year. Ad valorem taxes are a tax on value, rather than income, so it really makes no difference as to how many days a well produced during the year, its value is set by the reserves and estimate of future product pricing.
Severance tax is based on production and Income Tax is based on dollars received.
Best,
Buddy Cotten
Mr. Cotton,
Is there a resource where I can determine what the respective ad valorem taxes are in each county? We're working in Sterling County and I was told Sterling has the highest ad valorem taxes in the state. ?? I suppose the severance taxes would be listed in the same area?
Thanks for the help,
John Cannon
Buddy Cotten said:
Dear Mr. Davis,
I know nothing about Kansas taxing except what I just read through a google web search. It appears that real property is appraised as to value as of Dec 31st of each year. Ad valorem taxes are a tax on value, rather than income, so it really makes no difference as to how many days a well produced during the year, its value is set by the reserves and estimate of future product pricing.
Severance tax is based on production and Income Tax is based on dollars received.
Best,
Buddy Cotten