Impact of Fracking on Real Estate Value, Mineral Rights, and Ad Valorem Taxes - GoMarcellusShale.com2024-03-19T05:33:54Zhttps://gomarcellusshale.com/forum/topics/impact-of-fracking-on-real-estate-value-mineral-rights-and-ad?commentId=2274639%3AComment%3A715177&x=1&feed=yes&xn_auth=noSpeculation at it's finest to…tag:gomarcellusshale.com,2016-01-28:2274639:Comment:7151772016-01-28T08:24:24.874ZBilly Park Whydehttps://gomarcellusshale.com/profile/BillyParkWhyde
<p>Speculation at it's finest to say the least. With drop in oil prices would a land owner be allowed to receive a refund of the property taxes? Would the land owner be able to declare as a loss the amount of revenue they lost due to the drop in oil prices against former revenue? </p>
<p>But the idea has no bounds as anyone can guess what a grove of Walnut trees may bring, a crop of corn, or even milk production. </p>
<p>I liked your hypothetical case though theft in action. "<span> The offer…</span></p>
<p>Speculation at it's finest to say the least. With drop in oil prices would a land owner be allowed to receive a refund of the property taxes? Would the land owner be able to declare as a loss the amount of revenue they lost due to the drop in oil prices against former revenue? </p>
<p>But the idea has no bounds as anyone can guess what a grove of Walnut trees may bring, a crop of corn, or even milk production. </p>
<p>I liked your hypothetical case though theft in action. "<span> The offer was from a wealthy prominent attorney in the County who had just won election as a County Commissioner " then "<span>Anyway, it just so happened that one of the other interested parties was a County Assessor. While Joe’s asking price was way higher than what he was expecting, this got the Assessor thinking as it was time for Joe’s sexennial re-assessment. " Lets tax it for our taking then readjust the taxes!</span></span></p> Ted,
I live in Ohio. Many in…tag:gomarcellusshale.com,2016-01-27:2274639:Comment:7152342016-01-27T20:49:18.764ZD.C. Harrishttps://gomarcellusshale.com/profile/DawnHarris
<p>Ted,</p>
<p>I live in Ohio. Many individuals here own farmland but not the mineral rights that go with it. As you know, Ohio taxes only the surface value of the land, not the potential/mineral value, and "minerals" are taxed only when a well is producing--and it is the owner of the mineral rights who pays the tax. Thus, landowners who do not own their mineral rights are not taxed and cannot be taxed for the value/potential value of their minerals. The only way the State of Ohio or any…</p>
<p>Ted,</p>
<p>I live in Ohio. Many individuals here own farmland but not the mineral rights that go with it. As you know, Ohio taxes only the surface value of the land, not the potential/mineral value, and "minerals" are taxed only when a well is producing--and it is the owner of the mineral rights who pays the tax. Thus, landowners who do not own their mineral rights are not taxed and cannot be taxed for the value/potential value of their minerals. The only way the State of Ohio or any individual county could tax or begin to tax "land" based upon the value/potential value of the mineral rights below the surface would be for the State or the county to track down every single mineral rights owner and tax him/her/it (a coal company, e.g.), not the surface owner. The tax would have to be completely separate from traditional property taxes and equally assessed and applied across the board to all mineral-rights holders in the state/county. So in the case of a landowner who also still owns his/her mineral rights, that landowner would pay a traditional property tax and a mineral rights tax. If that ever were to happen, it would simply boggle my mind, and it would be a mess. Can you imagine families and corporations who don't even own any land getting tax bills for mineral rights that have not and/or may never produce a profit? I would hope the citizens of Ohio would be in an uproar over it.</p> I wanted to let everyone post…tag:gomarcellusshale.com,2016-01-21:2274639:Comment:7145322016-01-21T23:50:44.608ZKeith Mauck (Site Publisher)https://gomarcellusshale.com/profile/marcellus_shale
<p>I wanted to let everyone posting in this thread know that we have launched ShaleCast. I hope you find it helpful. So far the response has been really positive.</p>
<p><a href="http://gomarcellusshale.com/forum/topics/a-new-website-for-marcellus-and-utica-mineral-owners-from-the-pub" target="_self"><img src="http://storage.ning.com/topology/rest/1.0/file/get/35535307?profile=original" width="579" class="align-full"/></a></p>
<p>I wanted to let everyone posting in this thread know that we have launched ShaleCast. I hope you find it helpful. So far the response has been really positive.</p>
<p><a href="http://gomarcellusshale.com/forum/topics/a-new-website-for-marcellus-and-utica-mineral-owners-from-the-pub" target="_self"><img src="http://storage.ning.com/topology/rest/1.0/file/get/35535307?profile=original" width="579" class="align-full"/></a></p> It seems that some counties t…tag:gomarcellusshale.com,2014-09-24:2274639:Comment:6269712014-09-24T21:19:48.627ZWerner Kostendthttps://gomarcellusshale.com/profile/WernerKostendt
<p>It seems that some counties that don't have a strong recent history of oil and gas production don't bother with a separate minerals ad valorem tax. At any rate the ad valorem tax is not supposed to be charged until the well is put into production. So somewhat paradoxically the property that has never been drilled and has the highest mineral content and presumably the highest value, would not be taxed at all for minerals. </p>
<p>I have heard that there is one county Auditor who wants to tax…</p>
<p>It seems that some counties that don't have a strong recent history of oil and gas production don't bother with a separate minerals ad valorem tax. At any rate the ad valorem tax is not supposed to be charged until the well is put into production. So somewhat paradoxically the property that has never been drilled and has the highest mineral content and presumably the highest value, would not be taxed at all for minerals. </p>
<p>I have heard that there is one county Auditor who wants to tax these reserves, regardless of what the state law says and says he will go all the way to the Supreme Court to say that those reserves have taxable value. </p>
<p>Here is the State's formula for the county's to use in calculating ad valorem value of minerals.</p>
<p><a href="http://codes.ohio.gov/orc/5713.051" target="_blank">http://codes.ohio.gov/orc/5713.051</a></p>
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<p></p> The ad valorem tax on gas and…tag:gomarcellusshale.com,2014-09-24:2274639:Comment:6267882014-09-24T21:06:26.870ZWerner Kostendthttps://gomarcellusshale.com/profile/WernerKostendt
<p>The ad valorem tax on gas and oil reserves are taxed only for the year in which, during any part of the preceding year, the well was in production. My understanding it is a formula based on the most recent year's production. It assumes a standardized rate of decline and is a factor which distills the results of a discounted cash flow analysis into a single number. The discount rate currently applied in Ohio is currently 13% plus a safe rate. The safe rate is something like the return on…</p>
<p>The ad valorem tax on gas and oil reserves are taxed only for the year in which, during any part of the preceding year, the well was in production. My understanding it is a formula based on the most recent year's production. It assumes a standardized rate of decline and is a factor which distills the results of a discounted cash flow analysis into a single number. The discount rate currently applied in Ohio is currently 13% plus a safe rate. The safe rate is something like the return on a Treasury Bond. If the well production declines in one particular year then the ad valorem tax will decline in a way modeling the decline in the reserve. Eventually once production gets so low the ad valorem tax will disappear. This is distinguished from federal, state, local, county income taxes which are applied to the net income generated from the well. It is also to be distinguished from the severance tax which is based on the number of barrels extracted from the ground. </p>
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<p></p> Actually, there is a movement…tag:gomarcellusshale.com,2014-09-24:2274639:Comment:6267472014-09-24T12:54:02.311Zpg guyhttps://gomarcellusshale.com/profile/pgguy
<p>Actually, there is a movement among liberal politicians to tax everything with some actual or imputed value. I believe it was Bill Clinton that proposed (many years ago) that if you own your own home, you are receiving a benefit equal to the fair market rental value of that house, and you should pay income tax on that value. Never mind that you are the one who paid for it.</p>
<p>Remember too: Elizabeth Warren (later quoted by Dear Leader Barrack) - you didn't build that…</p>
<p>Actually, there is a movement among liberal politicians to tax everything with some actual or imputed value. I believe it was Bill Clinton that proposed (many years ago) that if you own your own home, you are receiving a benefit equal to the fair market rental value of that house, and you should pay income tax on that value. Never mind that you are the one who paid for it.</p>
<p>Remember too: Elizabeth Warren (later quoted by Dear Leader Barrack) - you didn't build that business......</p>
<p>No limit to how much of your money the politicians, especially (but not exclusively) liberals, are willing to spend. Vote wisely next month, encourage your friends and family to do so also, because if we don't turn things soon, to bad for everything you and your predecessors worked for.</p> It is just another case of a…tag:gomarcellusshale.com,2014-09-24:2274639:Comment:6267442014-09-24T12:37:48.438ZPaul Martinellihttps://gomarcellusshale.com/profile/PaulMartinelli
<p>It is just another case of a Govt. Agency wanting to get a bigger slice of the land owner's money.</p>
<p>Why should minerals that are not being produced be taxed? They only have value when sold.....and then they are taxed. Are we going to start taxing everything that potentially has a value? What is the tax rate on trees?</p>
<p>What is the tax rate on water? What is the tax rate on oxygen produced by vegetation? When does it stop?</p>
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<p>"<font face="Calibri">When I see these…</font></p>
<p>It is just another case of a Govt. Agency wanting to get a bigger slice of the land owner's money.</p>
<p>Why should minerals that are not being produced be taxed? They only have value when sold.....and then they are taxed. Are we going to start taxing everything that potentially has a value? What is the tax rate on trees?</p>
<p>What is the tax rate on water? What is the tax rate on oxygen produced by vegetation? When does it stop?</p>
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<p>"<font face="Calibri">When I see these vast acreages of land being bought and sold by Chesapeake or another oil and gas company for such and such a price are they typically selling the surface and minerals or are they almost always talking about just the minerals?</font>" They are almost always talking about just the minerals.</p>
<p></p> In my experience, a 1099 is i…tag:gomarcellusshale.com,2014-09-24:2274639:Comment:6266632014-09-24T12:28:49.153Zpg guyhttps://gomarcellusshale.com/profile/pgguy
<p>In my experience, a 1099 is issued to the payee, and a report of same is sent to the IRS. Any further disemination of a 1099 is up to the recipient. I have issued tens of thousands of O&G 1099s over a period of many years, for income generated in multiple states and paid to recipients in every state, and never once provided the information to anyone else, unless directed by the recipient, in writing, to do so.</p>
<p>My guess is that any back taxes deducted from bonus payments are the…</p>
<p>In my experience, a 1099 is issued to the payee, and a report of same is sent to the IRS. Any further disemination of a 1099 is up to the recipient. I have issued tens of thousands of O&G 1099s over a period of many years, for income generated in multiple states and paid to recipients in every state, and never once provided the information to anyone else, unless directed by the recipient, in writing, to do so.</p>
<p>My guess is that any back taxes deducted from bonus payments are the result of liens on the property.</p>
<p>Additional question I have: If property valuations for tax purposes can be partially based on mineral values, would not the taxes be reduced after a few years of production, when the minerals are largely depleted?</p> I'm not sure I understand exa…tag:gomarcellusshale.com,2014-09-24:2274639:Comment:6266062014-09-24T03:05:51.110ZWerner Kostendthttps://gomarcellusshale.com/profile/WernerKostendt
<p>I'm not sure I understand exactly the question?</p>
<p>I'm not sure I understand exactly the question?</p> Is it called clean and green…tag:gomarcellusshale.com,2014-09-24:2274639:Comment:6268362014-09-24T01:20:59.324Zcj wyalusinghttps://gomarcellusshale.com/profile/cjpalmer
<p>Is it called clean and green .?</p>
<p>Is it called clean and green .?</p>