Are Texas counties backlogged in tax assessment of first-time mineral production? In January 2019, our acreage was drilled for the first time and commenced royalties, but Reeves County never sent us a minerals tax assessment in autumn 2020. We continue paying only surface taxes. Are Texas counties so far behind in setting up first-time minerals ad valorem taxes? I suppose the pandemic worsened bureaucratic delay?
We have not asked the county about their delayed minerals assessment, “let sleeping dogs lie” because delayed tax bills are not altogether bad. We know eventually the mineral tax bill will come and may be hefty, since royalties began two calendar years ago.
Roy, our statements usually arrive like clockwork,
but this year some family members received them
and some didn’t.
That being said, not receiving a statement doesn’t excuse
the owner from interest, penalties, tax liens and possible
foreclosure. Having to get an attorney to clean things up
after the fact will almost surely cost much more than the
taxes ever would have.
As I am rapidly learning, being an overly passive mineral
owner is an invitation for many problems that don’t get
a lot of sympathy when you try to make corrections after
the fact.
Check the Reeves County tax office under your name and various spellings. Go to first property on your list with a value and click on Tax Summary. This will show if you are listed as still owing any tax. On the top right, you can then go to Next Property and and see the Tax Summary well by well. Be aware that there are other owners who have not received tax statements and you may want to pay off the downloaded statement to avoid fees and fines. Also, ask for the return receipt as there are taxpayers who are being double-billed and taxed twice on the same wells.
Thanks. We family members paid our surface taxes, for many years, our surface tax accounts begin with letter ‘R’ show paid current. The problem is the county has not yet created minerals ad valorem accounts for us, mineral tax accounts begin with ‘N’. We simply do not have N-accounts yet because evidently the county is far behind in setting up new first-time mineral ad valorem accounts.
I will just go ahead and contact the county tax assessor, hope to reach the Chief Appraiser, ask why county has not yet created or assessed our minerals production which began in 2019. I’m sure he/she will simply say the county is backlogged due to pandemic. I avoided alerting them to their delay thinking it would be better to receive our first mineral tax bills in the future instead of the present.
When I called the Appraiser’s office, it was like they were
waiting for my call. They gave me my balance and e-mailed a statement. It took about a minute. A minute to avoid future
problems was time well spent.
Thx, I’ll phone ReevesCAD this week, satisfy my curiosity. I’ve avoided it, didn’t want to hurry them in sending us a whopper tax bill for first-ever minerals production. My curiosity is overcoming “let sleeping dogs lie”.
I looked to see if Reeves County established mineral tax accounts for our operator, and was surprised. Operator simultaneously drilled two 2019 “twin sister” horizontal wells both profitable, but only one of the two sister wells has a mineral ad valorem account. In other words, the county is slow, and sets up first-time minerals accounts piece by piece, starting with the operator and eventually sending the royalty owners their first-time minerals assessments months or years after production commences. I guess our first minerals ad valorem bill will be sizeable.
If the two wells have a shared RRC oil lease number, then they will be valued together. If they have separate RRC oil lease or gas lease numbers, then there will be separate valuations.
Often times when a new lease is drilled, the county is waiting on the operator to provide them a division order. Operators must submit a request to the appraisal district to split the mineral, royalty, and overriding interests out - so that they are appraised / taxed separately from the working interest. When this request is made, the operator provides a division order so that the county can set up each owner on the appraisal / tax roll.
It is not uncommon that operators are delayed in reporting the ownership to a county, sometimes even two or three years.
Thx all for input, will post if I learn anything new or helpful. Reeves County told me they now prepare mineral valuations in-house, no longer outsource the third party Capitol Group. I emailed both ReevesCAD and operator but no response from either.
Bottom line: our royalties commenced 2019, no idea when Reeves well eventually assess and bill us ad valorem minerals tax.
In Texas, the counties have up to 5 years they can do prior assessments on. So just make sure you hold some money aside for when they do finally send you the appraisal and tax bill on it.