Reeves Co. Production Tax

BHP Billiton has drilled on the lease we have a tiny interest in and is mailing checks to all the heirs. Does Reeves Co. tax the production?

The information I was given is that there is a deduction for severance tax. Don't know if it is county or state. Oil is 4.6% plus $.00625 per barrel and gas is 7.5% plus $.000333 per mcf.

This is state severance tax and oil field clean-up fund tax. Reeves County will assess ad valorem tax and statements are sent in Oct / Nov.

Thank you, an heir with 1/4 interest has paid the property tax for years, the Reeves account number is now listed as "Commerce First Royalties LLC" so they will know how to find us. I can't find the ad valorem tax rate. In general what percentage of oil production will this be? If we throw these checks in a Roth IRA we will be paying 25%

You must own surface if you have only now started to receive royalties. Abbott & Prichard will determine the present value of the well(s) based on production volumes, current prices, decline curves, etc. Reeves County will set a tax rate and the taxes on valuation will be allocated among the operator, royalty owners and overriding royalty owners based on proportionate DOI in the well. Each owner will receive a separate tax bill.