Real estate taxes on minerals

I received about 40 tax bills, for oil and gas minerals only, for real estate I sold many years ago, but reserved the minerals. Each acre has a tax value of $200.00 even though I have not even leased any of the acreage. I spoke with the Auditor's office and the gentleman seemed certain that the county has the right to do so even without production or even a lease to drill. Does anyone else have any thoughts on this matter. Thanks...

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Permalink Reply by Aaron Brown on February 25, 2013 at 11:18am
hunter, is this a new development? You said you sold the 40 properties years ago and reserved the mineral rights. What has the county been billing you for the years since you sold them until these recent bills? Has the county been steadily increasing the value up to the $200/A you state, or did they just recently ‘arbitrarily” assess the minerals at $200A? what state is the property in?
Permalink Reply by David Mohn on February 25, 2013 at 2:20pm

My question would be how do they know for certain you have minerals under your property.  We all assume we do but until you actually drill down and produce they are only speculations.  Drilling companies do hit dry holes once in a while.  I would really challenge that if you can

Permalink Reply by hunter4440 on February 26, 2013 at 2:34am

After a conversation with the Auditor's office, it is my opinion that they are following suit of other counties. Comparisons were made to Carroll and Harrison counties. My response was that I would be happy to pay taxes on properties in areas of a proven track record, however, Ashtabula County has none. The values are obviously arbitrary. When questioning the value, I was told that it is my responsibilty to prove that the assessed value of the oil and gas minerals are less than valued.

Permalink Reply by Denver Gallentine on March 4, 2013 at 9:29am

Hunter 4440, I own both land mineral rights in Carroll County, Ohio. It is unimproved woods. I paid about $42.00 per acre in taxes this year so I do not know where your countiy's auditor is coming up w/ $200.00 per acre on just mineral rights. I do not see how he/she can make a comparison to Carroll County. I also have just mineral rights in Marshall and Wetzel Counties in WV. In Marshall County I pay about $3.00 per acre and less in Wetzel County. I guess counties can look @ POTENTIAL value and tax that (you may make money in the future or you could sell the mineral rights now for profit). Persomnally, I cannot understand how they come up with $200.00 per acre. I assume here is a state board you can go to to challenge the cost. Hey, @ that price the auditor must think your mineral rights are VERY valuable. Maybe he/she will buy them for the amount he/she seems to think they command. 

Permalink Reply by hunter4440 on February 25, 2013 at 2:26pm
This is the first time for such bills. Again, I own no surface and reserved the oil and gas minerals only. I might understand if production could prove value, otherwise,I believe the county is reaching for dollars.
Permalink Reply by gmbh on February 25, 2013 at 3:30pm

Hunter if you only own the oil and gas rights and not the rest of the minerals you should not have to pay taxes. At least this was what the auditors office in my county told me.

Permalink Reply by Ireland on February 25, 2013 at 3:48pm

I think its crap but they can do it. I own 12 properties in Clearfield County, PA  that I own just mineral rights no surface and they tax me every year, twice a year. I think its double dipping but what can you do?

Permalink Reply by Lance Nimmo on February 26, 2013 at 1:57am

It's only fair. Why should the surface owner foot the whole tax bill, while not enjoying all of the covenants of the property?  I sold property and reserved the subsurface rights. I would have no problem paying taxes on my share of the estate, as the surface owner is paying taxes on property that could be subject to major disturbance. To each their own...

Permalink Reply by Dan on February 26, 2013 at 2:08am

For those that retained severed sub-surface rights and have had the surface owners try to steal them back............. they would love the paper trail of O&G taxes paid to prove active ownership.

Permalink Reply by Lance Nimmo on February 26, 2013 at 2:50am

That sir, is a great point...

Permalink Reply by BuckinghamGasMan on February 26, 2013 at 5:55am

I think you need to tell us what State you're in -- that makes a difference. Also, each County in Pa has amazing latitude, mostly because you have to sue in each county to force them to comply with the state law. Are they doing this because they have always done it for coal? If they have an assessed value, it also means that they have determined a market value (that would be good information to have. It may pay you to review the assessment cards in your county tax office or check the tax duplicate at the tax collectors or municipal secretary's office. Find out the name of the actual assessor, he/she will be able to tell you why they picked that number (whether or not they will tell you is a different question). There are also companies in the State who specialize in tax appeals and might be able to tell you your chances of winning an appeal.

Permalink Reply by Janice L. Hancharick on February 26, 2013 at 9:24am

BuckinghamGM, you are correct.  In PA for decades everyone who owned subsurface rights paid a tax on them whether leased or not.  Determining the value was a guesstimate determined in each county.  People paid, and as illogical as it seems, the practice did keep OGM ownership records straight.  The practice was stopped a number of years ago in PA's 4-County region, and beyond.  That sounds all well and good, but here is the fly in the ointment.  Not all counties stopped levying the tax @ the same time, so there was confusion among those owning "rights" across county lines.  Pay?  Don't pay?  Those in the know scooped up considerable OGM AC @ tax sales from folks who weren't clear on the ever-changing taxes.  What a deal for some!  What a shame for others.  Accessing old tax records to determine who owns what below the earth isn't always easy, but it's certainly worth the effort.  Tongue in cheek... get rich quick by becoming an abstractor!

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