I wanted to see if anyone else has received their new tax appraisal on royalty interests and if it jumped up astronomically since 2009. My aunt's went way up. Not sure if it is an accurate reflection of the increase in oil production. Any feedback?
Unfortunately, the tax on royalty interests are determined by a third-party hired by the appraisal district and the value is what they determine is underneath the ground. It is not a tax on what you receive in royalties each year (like income tax). Many years ago my family and I filed protests in Grimes County and went before the appraisal board, but it didn't do any good.
I find it hard to swallow that as the wells deplete that the value of the royalty goes up!
Oh I could write a book on this subject. Grimes county went up 83% and us a RI owners have ZERO standing on protest. Our value is 100% related to the operator well value. Its all based on the operator to protest. I was in a new unit two years ago and requested the info for my tax appraisal on determination on value. CAGI does the Grimes county. So I had that first years value data. Then this last year mine went up about the same as yours so I requested again. What I noticed was the future years production on the 2012 value was only about 6 years, but the 2013 value info had it out for 30 something years. Although they called for 2400 bbls a year in the future and discount the future $$$. But good news is that I saw my operator ( Crimson/Contango) had it under board review and just last week or so it went down to only a 20% increase. I will requesting the new CAGI info to see what changed here in few weeks. Go to the Madison county appraisal website and check your operator and see if they are in process of protesting. Sure they are because it saves them huge amounts of money. I have seen some new wells come in appraised at 50 mil then reduced down to 12 million. I guess its a way for the CAD see what sticks.
Best of luck and let me know if you need anything else.