For the first time, I have a big mineral producer that doesn’t withhold for Oklahoma state withholding taxes. What should I do?
All our mineral holdings are in a trust, so that once a year, the trust files the non resident tax form which reports how much has been paid and withheld and then the two recipients of the trust report to the feds and the state what has been paid and withheld and we pay whatever is owed. Neither the trust nor the recipients pay anything directly to the state or the feds until we file this form.
But this is going to be a big monthly payer. I can’t imagine that we could wait until tax time to report everything to the state and then pay withholding tax due. What do we do? Do we (the trust or the two recipients) have to calculate and pay estimated tax directly to the state all year? How do we do that? Would appreciate any advice!
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Sounds rather unusual. OK companies routinely take out the severance and production taxes. It is the federal taxes that you can choose whether or not to have them taken out-usually a line on the Division Order. Have you received the first statement from the new wells yet? There are usually tax lines on them. You can use your decimal amount to calculate your net if the gross is listed. You can also go to the Oklahoma Tax site and look up the wells. It will show the tax amounts that are assigned to the wells for oil and gas. Those could be used as an estimate. You could also talk to the owner relations group at the operator and request they they take out the taxes.
Also, be aware that you do not have to sign a division order in OK. You an send a letter in lieu to make sure that they have your W-9 and confirm the decimal amount. Use the magnifying glass in the upper right to find a template from that thread on the forum.
Pick the qualifying tax rate option
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VivianV. As another non-Oklahoma resident, I have been through this. Some payers label it as State Withholding Tax, SWH, OK Non-resident tax, OK Withholding, etc. My experience is that when I go into pay status with a new payer, the payer’s default is to assume that I am on OK resident. I typically reach out to Owner Relations and they provide me with a form where I declare I am an non-resident and they withhold accordingly. I hope this helps.
Very helpful, Martha! Thanks so much.
