Royalty Taxes

General Mineral Rights Discussion
#1

I have a question, why does everyone that receives royalities no matter how many times it is divided have to pay the same amount of taxes? If I pass on, then the royalties are divided between my two kids, but they will then pay the same amount each the same as I paid for one. So if the whole family receives checks for royalties and there is many in the family and everyone pays the same amount, no matter how many times it is divided. I have cousins on the other side of the family that receive checks for mineral rights that their grandmother left them, but they don't pay taxes to the counties. I hope this made sense to everyone? Can someone explain this to me?

Thanks,

Randy

#2

Dear Randy,

You cannot explain a mistake. The tax appraiser is charged with valuation of properties, whether it is oil and gas, home values, value of a mobile home, etc. As to a partial interest owner, the owner is charged its proportionate share of ownership.

If this is not the case in your county, it is your duty to protest either the valuation or the method of computing the tax.

#3

Randy - I assume these are property taxes assessed against your minerals. Most counties won’t bother to assess and collect taxes if the the valuation of the minerals which are producing and against which taxes are assessed are so low that the tax collected are very small - usually less that $25 per year. When this happens, some counties will wait until the aggregate amount of the assessments total an amount above a threshold - ususally $100, and then issue one tax bill for several years of back taxes.

As Buddy says, the valuation should be proportionate to the interest. So it sounds like something is wrong there, and y’all should look into protesting it the amounts justify it…

Hope this helps.

#4

Thanks for the replies to my question. Scurry county is where we pay the taxes and they’re about 900 dollars a year, and from what I see on some of the paper work, a good amount goes to the schools there. So, I guess I’m still confused a bit, my mother inlaws father left these royalties to her and her brother, and both paid the same amount of taxes, so now that it has been passed down again, the same amount is being paid no matter if it were divided once again. But overall, there is probably 100 people so far that is receiving royalties and each and everyone is paying the same amount for taxes. The land is owned by another member of the family. But I guess I will have to contact Scurry County offices and try and figure out how they work these figures. It just doesn’t seem right in my mind. Thanks again to Buddy Cotten and G C Gill.

#5