Good morning. I am trying to understand royalty revenue statement for oil and gas in Texas. There are four categories: owner gross value, owner deductions, owner taxes, owner net value. What are owner taxes—does that include the owner’s federal income taxes paid to the IRS for that month for proceeds on the sold oil/gas? How would the oil company know what tax rate the mineral interest owner is in? Thank you.
The taxes are Texas severance tax on oil and gas and oilfield clean up tax. Oil tax is greater of: 4.6% of gross sales less any costs or $0.046 per bbl. Gas and NGL is 7.5% of value. Oil filed clean up may be combined or stated separately and is $0.625 cents per bbl and clean up is $0.000667 per mcf produced. Federal taxes would only be withheld if you did not provide a tax id #.