royaity taxs

I received a tax bill with my property tax bill for royalty tax. It had no dates on what this covers,called the county,and they said they were only collectting this for the state.Called the state and did not get a good explanation of what this tax is.I paid state income tax on the royalty i received and was told this was tax for the oil still in the ground ,I told them it has always been there and I did not pay tax on it.Untill I get some answers I do not intend to pay this tax.How many times can the state tax the same dollar.I think we should ban together and get some answers from the state as to rather they would prefer we pay this tax or income tax on royalty income . what are ever ones thoughts on this tax 

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Permalink Reply by AJ on February 14, 2014 at 7:56pm

I have been busy and did not have time to keep up. I went directly to the court house and received a very concise answer on what this is all about. There is and has been a real estate type tax on the reported production of a well. This has been figured on the shallow wells in the past. The computation is pretty straight forward. The O&G company reports the production for each well. The state of Ohio sets what the value of each barrel, etc. is worth. Then a value is set on the production. After certain reductions, etc the resulting value is taxed at the current real estate tax value. The O&G company pays their share and each royalty owner pays according to their royalty %. Some companies pay it all and some companies are not playing along and reporting their production so when they do there will be a bigger bill to pay. This tax will go up and down as the production on each well changes. It is assessed over a year later. 2012 production is reported in 2013, the math done and bill issued with the first bill in 2014.

So yes, we are paying fed income tax, state income tax, severance tax, commercial activity tax and now real estate tax on the same income. and if you live in town you also pay the city.

The money stays in the county at the same percentage as all the other real estate taxes. Look at your bill to see where it all goes. And at least with this one the company is paying into local tax coffers for once.

Permalink Reply by scott peterson on February 14, 2014 at 8:21pm

I believe this is called "Ad Valorem" tax......

Permalink Reply by Rich on February 15, 2014 at 7:26am
So let me get this straight. You pay all those taxes on your royalty's an then you have to pay taxes again when you claim the income on your taxes at the end of the year?
Permalink Reply by Tim Tarr on February 15, 2014 at 12:42pm

Don't forget there will be an additional "Medi-care" tax (3.8%) If your income is above 200K .Are you Taxed Enough Already?

Permalink Reply by scott peterson on February 15, 2014 at 12:44pm

Pretty soon there will be a Fart Tax and we will all have to wear a monitor on our asses!

Permalink Reply by Fred Flintlock on February 15, 2014 at 1:06pm

Poor baby.....I would be happy to make 200k for something that was underground and had no way of making money from it other wise.

Permalink Reply by scott peterson on February 15, 2014 at 1:48pm

over taxed none the less....

Permalink Reply by Booger on February 15, 2014 at 4:38pm

FF .........dude, i think you missed the point.

Permalink Reply by ed carrick on February 17, 2014 at 12:33pm

when your 200k shrinks to 50k after taxs lets see how you feel about it.(your 200k is only a dream).How many acres do you have leased??? Ed

Permalink Reply by Fred Flintlock on February 17, 2014 at 2:10pm

75% tax seems steep, but when Corbett is out, we might see that.

Permalink Reply by Finnbear on February 17, 2014 at 3:18pm

FF

Jealousy rears its ugly head.

Permalink Reply by scott peterson on February 17, 2014 at 3:28pm

Finnbear, I just noticed the Sako....now ur name makes sense....good taste!

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