I have minerals in Texas, Production company is in Co. Do I have to file a CO tax return when I live in Texas where the minerals are? I got a notice from the Colorado Department of Revenue.
I live in Texas and have to file a state CO tax return. If you got a notice, then pay attention to it. I pay CO county taxes in the counties with production on top of that.
Thanks for the response. I could understand it if the minerals were in Colorado. I filed an Oklahoma tax return for interests paid on minerals in that State. But I don’t understand why I have to file a return in CO when I don’t live there and the minerals are not in that state.
You only pay taxes to the state(s) where the income is from. So if you don’t have income from CO, you don’t file or pay CO taxes.
Misread your message. Thought you were in TX and minerals were in CO. Contact the taxing authority and ask them why they think you owe in CO. May be a mis-ID or you might have something you don’t know about. You only have to pay where there is production and you get revenue.
Thanks, M_Barnes. And Todd, that’s what I thought. Jagged Peak out of Colorado was who had the lease in Texas. But the minerals are all produced in Texas. I have no mineral production in Colorado and don’t live there. Just got checks from Jagged Peak out of Colorado.
I believe there should be an email address on the Colorado notice. Send an email stating that you do not own any mineral property in Colorado and are not receiving any income from Colorado source property and that you are resident of Texas. We did that for one of our clients in WV who received a similar notice and Colorado eventually responded with a letter stating the matter has been cleared up.
Jeffrey, thank you so much for your response. I’m going to follow your advice to begin with. The letter said wait for the bill. But maybe I can head that off at the pass. Worth a try anyway!
I did speak with an agent this morning in CO and he agreed that I would not owe the taxes under the circumstances, but that I would need to send proof by virtue of my Federal Tax return info, etc.
Hopefully I can communicate with them in advance of the actual bill being received by me making this a moot point. Thanks again!
Look at your 1099 form. The operator should have noted that the royalties were from Texas. If there are royalties from multiple states then the operator would separate the royalties by state. This information may be on the front or on the back of the 1099. If the 1099 notes Colorado or just leaves the state information blank, then demand that the 1099 be corrected and reissued. You have been given bad advice by CO tax office because your federal tax return will not specify a state of origin of royalties.
I did look at the 1099 as you suggested and it does not note a state. They are going after the rents portion, not the royalties portion. It’s a substituted 1099 form and is hard to read. I did send CO Dept. of Revenue an email stating I own no producing minerals in CO and that the 1099_MISC, rents in question are defined from mineral interests in the State of Texas where I am a resident. We’ll see if that gets any response before they send an actual bill. Thanks for your help.
You need to contact the operator and demand a corrected 1099 which sets out that all the revenues are from Texas.
That company was bought out on 2019.
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