Does Texas tax mineral rights like they do surface rights?
I came across what appeared to be some assessments on some properties in Texas. Everything else is in Oklahoma which is not taxed.
Rick:
I don't think that Texas taxes mineral rights. I live in Texas but my minerals are in ND and MT. As far as I know, the taxing end of it comes when you lease or recieve royalties from minerals.
Texas does tax PRODUCING mineral interests, and all assessments go through the local county tax assessor. Oklahoma does not assess in this way as you mentioned, although they get you at the other end with a severance tax when oil and gas is sold.
This apears to be (or have been) producing. They are several years old records. I’ll have to put them in the pile to research. I don’t see where any have been paid.
Rick:
I want to clarify my answer as I was not referring to "producing" minerals as I thought you meant everyone who owns minerals (no producing wells). I believe some States tax the minerals even though no production is occurring.
West Virginia does. It makes it easier to keep up with ownership and current addresses.
charles s mallory said:
Rick:
I want to clarify my answer as I was not referring to "producing" minerals as I thought you meant everyone who owns minerals (no producing wells). I believe some States tax the minerals even though no production is occurring.
Rick - I dont believe we have a final answer.
I have known people who acquired non-producing mineral interests at property tax sales in Texas
And at one time I obtained a partial list of ppl paying taxes on non-producing minerals in a county to see about possibly purchasing some. I had to tell a couple of li'l old ladies -- look, your husband reserved some mineral rights for 20 yrs, but that was 40 yrs ago, & good luck on getting any taxes back now as the time to protest has passed
Now, since then there may have been a law, Const Amendment, or Atty Gen Opinion exempting small non-producing mineral interests from taxation, but we have several individuals with thousands of non-producing mineral acres & I'd be shocked if they exempted them. But I've been shocked before.
I hope they were not lost to taxes. I can tell it was producing at one time. This notice of appraised value shows the estimated tax at 28 cents. They are from 1993.
I own several dozen producing and non-producing mineral interests throughout Texas, and have owned them for several years. Let's be clear that we have a final answer.
PRODUCING mineral rights are taxed by the county assessors in Texas. NON-PRODUCING mineral rights are NOT taxed by county assessors in Texas. It does not matter how big they are.
Prepare to be shocked.
Call the Tax Assessor in the appropriate county and they can help you with this.
An estimated tax of 28 cents likely would mean either minimal production, or tiny acreage, or both.
You are absolutely correct. The only thing that may shock the owner of the producing minerals is the value the county tax assessors place on those minerals. The tax is not based on the dollar amount of royalties you received the previous year. Filing a protest did us no good whatsoever. We were taxed based upon what was determined to be the value in the ground, or at least that is what we were told. The actual tax bears no significence to what you receive. For example, suppose you received $100,000 in royalties last year. Your tax assessment may be based upon a value of $300,000. The counties hire an entity to value these minerals and the yearly tax is based upon a figure these people establish. I don't think this is a fair method of taxation - basing the tax on what "might be produced." Eventually the value and tax dwindles as the well depletes, but you are still paying taxes on a phantom number before that time.
JW Anderson said:
I own several dozen producing and non-producing mineral interests throughout Texas, and have owned them for several years. Let's be clear that we have a final answer.
PRODUCING mineral rights are taxed by the county assessors in Texas. NON-PRODUCING mineral rights are NOT taxed by county assessors in Texas. It does not matter how big they are.
Prepare to be shocked.
I did find a statement from the Texas Comptroller of Public Accounts that no property taxes are due on
“Income-producing or mineral-interest properties valued at less than $500”. (March 2011)
I believe this is the answer.
Did a bit more checking & have found statements that there is nothing in Texas Law that exempts non-producing mineral interests from being taxed.
The problem is placing a value on them.
Because of this, most counties don't tax them & causes some sites to say they aren't taxed in Texas -- which I believe is incorrect.
A # of yrs back I was being taxed in one county & not taxed in the adjoining one & I complained about it even though it was only a few dollars & they did take the interests off the roll.
Now I know some elderly people dont mind paying a few dollars as they like to be reminded of what they own & it might be of interest to know how many of our 254? counties try to tax them?
Thanks for all of the replies.
I’m going to try to find some of the newer records to see if I can match it up. They were inherited in 1993. I show a transfer of ownership was filed moving it to a trust. However, the document being filed does not mean much. My primary concern was the possibility of them being sold for taxes due. Hopefully I can get the documentation up to date. I’m sure I’ll be making a few phone calls to Nueces County before this is over with.
If it is anything like Kansas, each county is supposed to tax severed mineral interests. Some counties don’t follow through with it, some do. Every few years minerals will go up for tax sale in some counties.
rick --
if the mineral rights were producing or nonproducing & sold at tax sale, the redemption period I believe is 2 yrs
What is also interesting about mineral taxation in Texas - the school districts, like the county, tax the to be produced minerals in the ground. In the counties with substantial and increasing production this usually means the local ISD then receives more tax dollars than it needs to operate at its current tax rate.. Instead of allowing the local school district to lower the tax rate to equate local revenue to local needs, the state takes the local property tax revenue generated from the local property owners and redistributes their property taxes dollars across the state. This is known as "Robin Hood". It also results in double taxation by the state on the amount of property tax it collects from the local school generated by the minerals in place for the year thru Robin Hood, and then again when the same minerals are assessed a "severence tax" in the same year produced.