Will WV government send me a tax bill on my rights and royalties?

West Virginia Mineral Rights Wetzel County, WV
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Hi

I’m learning lots of good things on this site. I have 4 active wells in Wetzel that started to produce in March and have 4 planned and permitted wells in Tyler. Got my first royalty check last month, and should get good income from them for a while. I live in DC, and I know that I’ll have to pay some sort of tax on this, so will the state send me a tax bill? I have no idea on what I might owe and Turbo Tax seems to be clueless too. Is the tax bill delayed two years or so? I’ve had the rights since my mother passed in 2021, but did not get any tax bill yet. I got an upfront lease rights payment in 2024 too, and I paid federal tax and DC tax on it. But heard nothing from WV government on it. Should I wait till I get a notice from them? Given the backlog they have it’ll be a while.

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For your income tax, Turbo Tax should be able to help if you tell it that you have income in WV, assuming that you are a nonresident. If you have a certain income from WV in relation to your total income then you owe WV State income tax and might have to pay quarterly estimated tax. For the counties, are you currently paying any property tax in Wetzel and/or Tyler? If not, perhaps if you have inherited mineral rights someone else is paying the taxes for the total share or maybe nobody. The way the county knows if you have royalty income and therefore you (or somebody who has been paying the taxes in your ancestor’s name) is that the producer, the company, reports each royalty owner’s total yearly royalty amount, per well (I think) to the WV State Income Tax department. They then report this to the county involved. The county then adds this (somehow, in a formula) to the property involved and the tax is calculated according to the year’s tax rate for that county. This can get complicated. There is a 2 year lag between the first production of a well and when it shows up on a tax bill. Taxes are assessed according to who owns what in June of a calendar year. Again, this can get complicated. See if any of that helps explain things and if you have questions, please ask and maybe somebody can answer. One main thing to remember is: there are 2 types of taxes involved in your question: WV State Income Tax and County property tax (in your case probably 2 different counties. I a few cases the well pad is in one county near the border and it extended into another county. If your mineral interest is in the second county, that is who should tax you for property tax.)

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Thanks. I inheriteted the rights from my mother when she passed, but they were not in her will. Antero was able to track me down and my siblings and cousins too. It goes way back to my great grandfather, to my grandfather, then my mother as my father passed away before she did, a long time ago. I knew that we had oil wells as a kid, but that’s it 60 years ago. I thought it was a crank phone call when they first contacted me. Anyhow, I’m a DC resident, not WV and I’ve not heard from WV at all. So I’ll plan to do nothing till I see a tax bill from them in two years. So I don’t owe WV income tax but I think the wells do get taxed, least the rights do based on well production. I am not the surface owner. tricky stuff. The well heads or pads themselves are not on the property that I own partial rights to, but the horizontal shaft goes through it. Guess I’ll learn more as time goes on and give thanks to my great grampa for free easy money.

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About WV Income tax: if you earn “enough” (maybe $600 or so) income from WV, whether that is a part time job there, an investment in a business there, oil and gas royalty, etc, then you need to pay WV income tax. Turbo Tax can calculate it. I don’t think WV is going to contact you directly. Re the county property tax, probably somebody, one of your relatives, is paying the tax. Perhaps Antero can tell you. If the royalty gets high enough on this property and bumps the property tax up a lot, that relative might want help paying the tax or better yet it would be best to get the interests separated in the county. That can get complicated. The worst is, if the person paying property tax stops paying, the property (in this case, mineral rights or oil and gas rights) will be put up for sale in a tax sale. If you would like to see what you can find out, I can put a link to Wetzel County documents site. But Antero might be able to give you all that information. I’ve seen it happen (including my family way back) when minerals were kept together and not separated by owner that at some point, the payer of county taxes stopped, the property was sold, and the other owners didn’t know until it was too late. Not to be an alarmist, but look into it.

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The mineral rights in both parcels are separate from surface ownership. I got a lease bonus from Antero in Jan 2023, but only paid DC and federal tax on it as normal income for that year. Turbo Tax did not prompt me as to what state it was from. I’m sure the state will track me down if they want something. The govenor has skipped his taxes a bit, so we all should too.

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I think some in the WV legislature are hoping to eliminate WV personal income tax. And, I think TurboTax is not going to ask you unless you do something to make it ask you. Look into it, next time you use it. It is a fairly small %. You have to calculate all your income first even if you have income from other states. Not sure about DC but my state gives me credit for tax paid to another state on income from that state, so you don’t pay double state income tax on it. Keep good records, including anything that might be a deduction. When you get royalty income, you can take a 15% depletion (Turbo tax knows this!), but not on bonus money.

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Well I have all my receipts and I’ve gotten one royalty from Antero that covers 4 months of initial production, and I should get one month checks starting this month. Yes it would suck if I have to pay DC and Wv taxes on that income. I’ll probably just go pay an experienced tax preparer for it, for the first time to see how it’s done. Then I’ll follow what they did for the next year. My current wells should produce nicely for a few years and I’ll have 4 more come online by next summer in Tyler county.

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WV will send you nothing. You have to know to pay them. Your accountant should do this. I believe it is 5% of what you make. If you did not pay for a year that you earned money from a WV well, then you will owe the taxes and any interest and penalties.

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I just started to earn from actual wells this summer. The payment in 2024 was just a payment to lease the rights to Antero. I’ll hire a business level tax preparer. The regular ones at HR Block really messed up on my moms final return after she passed.

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There are several ways of tax preparation for oil and gas royalty and rental (bonus money) income. I have had 3 different preparers do 3 different things. If you have only one property, probably identified by Antero by a county, tax map, parcel number that corresponds with the surface tract (which many mineral owners do not own) then it is simple. If you have properties in different counties, unless they are leased together (very unusual unless they straddle a border between counties) then according to IRS they need to be put on different Schedule E entries. If you have more than one property in the same county that are under separate leases, generally they should be on different Schedule E entries. When choosing a tax preparer, ask for one with experience in oil and gas royalty interests. Good luck! This is quite a different thing than the county property taxes, as I talked about in prior posts. The tax preparer only needs to know how much county property tax you paid, as that is a qualified deduction for a Schedule E property.

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One is in Tyler and one is in Wetzel, they don’t touch each other but come close. Leases are under one agreement with Antero. I know the parcel numbers and the well names.

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Leased on one document but listed as separate tracts? That would, as I do it, require 2 different entries on Schedule E. Not a big trouble.Just keep as many records as you need, with any expenses including postage if you have correspondence about things, and if you have deductions on your check stub information for separate wells, keep all that separate. You will probably get paid by Antero in all one check or direct deposit. I’m not a lawyer nor an accountant but have had a few different kinds of strange situations that I had to research to solve.

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One person was paying the O&G property tax bill, and I inherited that bill. I have struggled to have it separated. Even though both the county clerk’s office and the O&G company have all the records necessary for separation, I found neither to be helpful. I went to an attorney for help. He said I had the information I needed without running the title, which is very expensive, especially if there are small interests. The attorney did nothing with this for 1 1/2 years. Finally, when I confronted the attorney, work was initiated this year, but it will be 2 years until I see results.

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Yes I was paid in one direct deposit check by Antero but given a detailed statement via email that shows the data for each well for each month, for each product. I assume the surface owner is paying the property tax for each parcel and I don’t think the surface owner is a co-owner of the mineral rights. So I do believe they are separated. Good thing I just retired and have time to learn all of this stuff! Let’s hope for a cold winter here and places where we sell LNG to get those commodities prices up!

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It is possible that the surface owner is paying the property taxes on the oil and gas rights but only if this never got separated in the assessor’s office where these records are kept. Here is a link to the Wetzel county website. If you go to the “How Do I” place, drop down to the “Search Public Records” and this is where you can look up deeds, leases, wills, and other documents. You have to prove you are not a robot, every time you enter this, or if you have been away from it for a few minutes. The search that appears, where you can choose “Individual”, “Firm” “Book & Page” etc, goes back to about 1993. Earlier searches require the Vault Indexes. Those are divided by Grantee (the one being given something) and Grantor (the one giving something) for Deeds and similarly for Oil and Gas Leases. These are divided by the letter of the alphabet which begins the name. Some letters have multiple listings. Once you select your letter, the next drop down choice starts with 0 (zero). This shows the index page for that surname or (if not enough index entries for a separate page) the first letters of a surname. Once you find your name (or page for the first letters) you go down to that page. Here you see the listings of documents for that surname or those names. There is a column for surnames, 3 columns for first names, a column for the opposite part (in Grantor index, that is for Grantees), a column for Book type (Deed, etc), a column for book number, then one for page number, 3 columns for date (month, day, year: this is the recording-in-the-courthouse date) then a column for description. You look, and if you find a document you think is useful, write down book type, book, page number. Then go to back to the main page at the top, and select “Index Search”, choose your book type, book number and page. Then you can see the document. As an example, we are looking for a deed from George and Jane Adams to a Mr. Carney. We first use the main search under “Individual” putting in “Adams” as Last name, “George” as First name. Nothing matches. Then back to the Vault Search selecting “Grantor Index to Deeds”. Select “A”. On page 0 we see that “Adams” has its own page, “37” (which continues to 38, and eventually 38-007. Not sure when they started this indexing system, but definitely handwritten and eventually typed). On the first page (37) we see an entry for Adams George and Jane W as grantors, to “John Carney” as grantee. We see it is Deed Book 10 page 580, [recorded on] Apr 19 [18]75 for “110 ac near Fish Creek”.

We then go to Image Search, putting in those search terms, we see that part way down page 580 starts a deed from “John K Batsford and George Adams to John Carney” at the end of the body of the deed we see that the deed is dated 23 December 1874, notarized 24 December 1874 and recorded at the courthouse in Wetzel County on April 19 1875.

Something to remember for Wetzel County: before sometime in the late 1840s, what is now Wetzel County was part of Tyler County, so if you need to search back that far, you have to go to Tyler County which has a somewhat different way of arranging their old records and indexes. For example they have a set of early deed books, then started numbering again with the newer ones (I think the change was when Wetzel became its own county or something like that).

There are also Will books, and Fiduciary books when there is no will but things get inherited.

Anyway, if you want to go searching for your ancestors, and want to use the Wetzel county books, you can try this. Ask if you have more questions.

If you want to look at tax records and see if you can find something about the surface owner, there is a different set of things available to do that. You can search by district, map and parcel if you have that, or by name. If you know the current surface owner’s name, you might be able to do a search in the database I referenced above for deeds etc. The best way to see where / when the minerals (oil and gas, sometimes there is a distinction here, and often in Wetzel Co. the coal rights were sold off in the 1890s) were “severed” as they say: in other words, when the surface was sold, sometimes with partial mineral rights sometimes not, and the original owner retained oil and gas rights. Back to this sentence: The best way to find out what happened is to find the current surface owner and trace back to the deed where the minerals were separated. This can be done but takes time and knowing how to use various databases. I know some of this and am glad to advise if you are interested. I have found that it is like solving puzzles sometimes, and can tell you a lot about your ancestors.

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Probably the reason it will take a long time to show up in the taxes is that most (probably all) counties in WV take the recorded owner on the last day of June of a year to be the owner for the following year’s taxes. Example: John Doe sold his property in April 2025 but didn’t get around to changing it in the courthouse until July 1 2025. He was still listed on June 30, and since 2025 taxes had already been prepared with June 30 2024 information, the 2025 taxes to out in John Doe’s name. The new owner could/should be listed as “in care of” with the new owner’s address. Meanwhile, for the 2026 taxes, the new owner should be listed. However sometimes there might be complications which take even longer to sort through. Etc. There is a procedure for getting things changed. If simple, such as John Doe sells to Fred Jones, Fred records the deed, and (maybe) the county uses that to change the tax ownership. However if it is complicated, there might be multiple steps. John Doe’s great grandfather James Doe died with a will, leaving all to his wife Jane. The will was recorded but ownership was not changed for some reason. The farm stays in James Doe’s name.Jane died without a will survived by 3 children one of whom was John Doe’s grandfather Frank Doe. They don’t get things changed either. Frank Doe dies, no will, survived by 2 children Walter and Joseph Doe. Things still don’t get changed at the courthouse. The farm is still in James Doe’s name or maybe “James Doe heirs” care of Joseph Doe. Joseph Doe’s son John finally inherits part of this farm and is faced with the task of changing everything. It has to go back to James Doe. There is a set of things that has to be done for each change. There should be somebody at the County Clerk’s office who is designated to deal with these things but he/she does not do it for the owners, just provides forms and information. Once John Doe gets James Doe’s estate sorted out, it is in the name of his widow Jane. Then John has to sort out Jane’s estate etc. With all this paperwork and record sorting out (death certificates, wills, etc sometimes from out of state) you can see how this takes time. The oil and gas company needs this information to get leases from all the owners of the oil and gas, so has it sorted out, but it is not their job to sort it out in the courthouse. Often they file copies of out of state wills or affidavits of heirship, which can be useful, but are not enough in themselves to do all this. Anyway that is my understanding of the process. For what it is worth.

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Thanks. My great grandfather on father’s side gave the mineral rights to my grandfather and grandmother as a wedding gift in 1929 or so and that’s recorded in the county records. Grandmother died in 69, so then they were owned by my grandfather, father died in 74, then grandfather in 76. Sooooo then the rights came to my mother who passed in 21 when grandfather passed in 76. When she passed the rights came to me and two sisters, and 3 cousins on my Aunts side, who was my fathers sister, when she passed in 98. So Antero or the landman had to go through lots of records to figure out this all out. I’ve looked at the wvdep maps and you can see two parcels with no wells on them in an area full of wells. I surmise that finding out just who had the mineral rights was too tangled up for most oil companies, so they didn’t bother till they realized some good production could be had in those two parcels if they took on the task of hunting down the rights owners.

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I’ve recently gone thru this for my mother’s mineral rights. She is a resident of Pennsylvania. You will owe STATE income taxes to West Virginia. But you will not be sent a bill by the state. You should receive a 1099 form from Antero, or whatever production company is sending you royalty checks (if the amount is over $600 per year, I think). You need to tell TurboTax that you had income in another state. That’s where you tell it you had income in WV. Then TurboTax will have you download the second state income tax forms and it will then have you fill them out. It will be a WV non-resident tax form. In fact, you generally go thru the process of entering the WV tax form data first so that you can then deduct that tax payment on your DC income taxes. In this way, you aren’t paying state income taxes on the income twice. The COUNTY will send you a tax bill, starting for the year that is 2 years after your first royalty check. It is your responsibility to keep your current address up-to-date with the production company so they can send the proper address to the counties. Actually, as mentioned above, it is sent to the state and then the state notifies the counties. It would probably be smart to locate each counties’ tax department website and learn how to query the records to stay on top of any taxes that have been billed to make sure they all get paid. Especially, if you move addresses now and then. Due to that 2-year delay, things could get screwed up with address changing.

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Well done cliffdiver62! Nice summary. It can get complicated!

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More thoughts…. You will receive the 1099 tax form in the tax form season for the previous year’s income. So if you received income from royalties and/or signing bonuses, etc. in 2025, you should receive a 1099 from the production company(ies) in late January or February. You will own taxes for 2025 income to the state of WV. In 2027, you should get a tax bill from the appropriate county(ies) for the 2025 royalty income.

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