Kansas Mineral Royalties Income Tax

Is it true that Kansas as of December 2012 does not collect State Income tax on

royalty income. Can it be confirmed that this also applies to Out of State owners?

I have been under the impression that royalties are not taxed if you have the ownership set up as an LLC. Kansas is no longer taxing LLC businesses for income.

Actually they are no longer taxing mineral royalty income.

Residing in Colorado makes up for that though.

You are correct.

I have been under that impression for some time - and was advised by one the most meticulous accounting firms in Minnesota. I had gotten all my tax papers together and hauled them over to the firm. All sorted out with supporting detail. When I went to pick up estimates near the end of a request for extension period. After briefly looking over things, she said "You don't owe income tax in Kansas. You pay your income tax in your home state. The home state verified this. I reported the income in my home state and paid income taxes there, and I was told my multiple people that it was proper. Deductions for taxes were listed on the stubs or enclosed detail. The checks were "net" income. I pay Ad Valorum taxes to several different Kansas Counties approaching 2K.. So I think someone better get the word out to Kansas Revenue. They were adamant that I have to pay my taxes to Kansas - and this was on the Kansas website.

Kitchen said:

You are correct.

Well, thank goodness for that. I had talked to someone at Kansas Revenue several months ago about three checks and about a small check I had mistakenly sent to sent to Kansas with a request for extension. I did that a couple other times - beginning to worry about the Kansas taxes. They again said I again said that I didn't owe anything - that they had 3 checks just sitting around for a couple years - one for $400, one for $450, and one for $700 in previous years - just sitting in in my account. When I figured this all out, I contacted Kansas and told them that I had mistakenly sent some little checks just in case I had underpaid. I had just ended a fight with Colorado, who were convinced I owed them $34 of back taxes plus interest and penalties. So I paid that and started my detective work. Turned out that there were some unpaid taxes of $32 that no one had paid taxes on after my father and later my mother had died. It was a forgotten mineral interest in Colorado that had never produced. My father had bought it in the late 60'swhen it was an area that was supposed to be a big uranium bonanza. No one even remembered it. I was just a child then. To cut to the chase, I finally after two years got a letter saying that they agreed I owed them no taxes, and sent me a check for $34 and have left me alone so far. Don't know what will happen, but that interest turned out to be a big Moffat County hot spot today. Problem is in the meantime lots of people died, passed the interests on to their children, and it is in a trust for my mother and her five siblings with mother as trustee - and where no successor trustee was named - ever. And so its dead - and now there are a dozen or so of their children, most of whom I never knew just champing at the bit, and they wanted me to do all the work. I don't think any of them came to visit my mother after the age of five. Ironic, isn't it. Don't you just wonder why we do this? PS - that took a lot of editing!!! I'm tired. So any advice about what to do about Kansas?

Good night - we have almost a blizzard outside - on October 12??

Several counties in Kansas do tax minerals and / or royalty interest. That is separate from the income tax. I’m surprised the operator was withholding this from your checks though. Normally that only happens if you are delinquent in paying property taxes, the county will ask the operator to pay it out of your royalty check instead. No idea about your Colorado interest being in a trust with no successor. You’d have to talk to an attorney but I would imagine there has to be some sort of remedy to clean it up.