I can see that this question was raised a number of years ago, but I couldn’t find a definitive answer.
Our oil royalty for the month of September 2018 bears a 4.61% severance tax. However, when I review the “lease drop” report on the Texas Comptroller’s web site, there is no severance tax reported. The gross volumes and production numbers reported on the lease drop otherwise correspond with the amounts on check stub for that month.
I reviewed subsequent lease drop reports through April 2019, and there were no “correcting-entries” of severance tax in subsequent months.
The producer is entitled to a partial tax exemption because this is a low producing lease (exemption No. 11). However, the oil was sold at $50.30/Bbl, and that is a high enough price to cause a complete phase-out of that particular exemption.
Is the producer charging our royalty for taxes that it is not paying the Comptroller? Why doesn’t the lease drop report include the gross severance tax amounts that are included on the check stub? Is the producer reporting these tax payments somewhere that is not publicly accessible?
What are my best resources to understanding the discrepancy between the amount of severance tax reported on the check stub and the absence of a severance tax amount on the monthly lease drop? Should I call the producer? The Comptroller?