We have been receiving royalty checks since February but don’t know how much to withhold for taxes to Reeves County. Anyone know the tax rate on minerals and condensate? Do they even tax condensate since that is extracted AFTER the gas is removed? Called the County but they couldn’t tell me. Gave me the name of their “specialist”, but he doesn’t respond.
Down at the bottom is a link to the Reeves County Appraisal District site with the list of the 2019 tax rates for the taxing entities in Reeves County that Reeves CAD collects taxes for. The 2020 rates haven’t been set yet.
You will be charged the County rate and possibly some of the others shown there depending where your mineral interest is located. School districts also charge taxes on producing minerals. That list shows the tax rate for Balmorhea and at least one other Independent School District but there may be others that collect their own taxes. As you’ll see the school district’s rates are higher than the County. You’ll need to figure out what school district you are in.
The tax charged on producing mineral interests is calculated based on the appraised value Reeves CAD places on the producing asset, which is different from the value of what is produced during that tax year. The State charges Severance taxes on the monthly production volumes but the lease operator deducts the royalty owner’s share of those taxes as shown on your monthly royalty statement.
In that earlier chain about Reeves taxes where you had posted, up in the older comments f100owner quoted an appraiser at Capitol Appraisal Group, who does the mineral appraisals for Reeves County, saying “I do want to be clear that this is not an income tax, so the proposed value on your leases is not what I expect you to make this year. The value is what they could be sold for if you were to want to do so. Just like your home or anything else, I have to put a market value on it. This value is going to be 3-5 times higher than what you generate in income on a given year.”
I’ve seen posts for others Reeves Co. folks talking about not receiving their notice of appraised value until long after their well started producing so you may not get one this year but if not they will make up for it next year.
How do we know what our entity # is?
Opps entity code per attachment?
If you can pull up your tax record on ReevesCAD.org it will show the tax entities that cover your property.
Thanks Dusty, That is very helpful.
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