Taxes on oil and gas and property producing oil and gas 2013

It's that time of year again to start gathering up all the necessary papers for the dreaded visit to the accountants office for tax prep.I know income and payroll taxes are going up.Just turn on the TV about every two minutes a reminder comes on.Serving on a jury and paying taxes is a small price for the opportunity lo live here.I'm not going to harp on that anymore but man take it easy on some of us,please.As I was standing around kicking the red dirt of Frio County a little bird told me I was getting ready to pay some more.This being my first time to have income from oil production I don't want any surprises.I hope this little bird was wrong because he told me I will see an increase in my property taxes from the well that's perched up on the hill on my property.I realize it is of value, but dirt is dirt.I admit I slept some in Texas Government class.Anyway,I found a nice report from "Texas Oil And Gas Association" titled STATE AND LOCAL TAXATION------THE ECONOMICAL IMPACT OF THE OIL AND GAS INDUSTRY IN TEXAS.The problem is it's dated January 2003.There has to be a more recent one but TOGA hasn't put one out.The little bird told me the county appraiser may go back five years and put a value on this well.According to this report each barrel of oil pays property tax for 5.7 years before it is produced.Gas pays 3.6 years.The state severance tax at this time was 4.6% for oil and 7.5% for gas.I see the latter taxes on my check stubs.I am guessing that is what it is.I am looking for a fresh report and any input on the matters of personal property taxes since I own the surface where this well is.And maybe others in the forum would be interested.Meanwhile, I will be waiting on my new appraisal from Frio County.

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Comment by J. D. Bowen on January 3, 2013 at 4:42pm

You should already have  your 2012 county property tax bill.  In DeWitt County, as I assume all other counties, you are taxed on any portion of a unit that you sit on top of and I was told the tax rate is formulated on remaining reserves for that unit.

Comment by Mark on January 3, 2013 at 5:16pm

And I always wonder how the county estimates remaining reserve potential in any play let alone unconventional intervals like the Eagle Ford

Comment by J. D. Bowen on January 3, 2013 at 5:54pm

I was told by the local tax office that the appraisal folks work in concert with the producers to determine the taxable reserves.

Comment by Mark on January 3, 2013 at 6:00pm

That's great when the operators are tossing around 700-1000 MBOE EUR's per well

Comment by Wade Newsom "Perdida Camaronero" on January 3, 2013 at 6:26pm

Like I mentioned this is my first time in the oil business and failed to state our completion date was this June.I am sure the appraiser is out and about taking pictures for the upcoming year.The county I live in has already paid me a visit here with a tape measure and camera.In regards to Marks comment on how they do the magic of estimating I believe it is explained in this report I read,although dated 2003,on page 25 or thereabouts.I dug around in the tax codes long enough to get a headache and then gave up.Texas Oil And Gas Association does have a 2010 presentation of the Oil and Gas Business "Fueling The Texas Economy." It has some interesting numbers on the effect that the recent oil activity has had in Texas.

Comment by Danny Braun on January 9, 2013 at 12:20pm

These taxes you are speaking of are they against the land owner and producer or dose it include royalty owner as well.  We don't own property that is associated with the well.  We will only get the royalties someday.  Hopefully. 

Would like to be prepared.  Income tax for sure, but never occurred to me that I might be hit with other taxes.  Thanks


Comment by victor mozisek on January 9, 2013 at 2:01pm

There are 2 kinds of property that the counties tax, real and mineral.  Real property is the surface and all improvenments.  You probrably have been paying this tax already.

Mineral property is the taxyou pay on oil and gas minerals.  Your share of the taxes is based on your mineral interest in the unit.

In Gonzales county CAD, you can select either one of these when looking up your property tax.

As a note, our mineral tax bill was half of the apprasial value that we had received last summer.  I was told that the bill was lowered because EOG, the largest mineral protested the tax apprasial and was successful in getting the tax billed. 


Comment by Wade Newsom "Perdida Camaronero" on January 9, 2013 at 3:59pm

Lets try it again.

Comment by Wade Newsom "Perdida Camaronero" on January 9, 2013 at 4:02pm

I entered the link incorrectly. Got this from the appraisal district in Frio County.Looking at their map they appraise a lot of the oilpatch.


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