I am still on old leases, but someone please reason this on out for me…
If an operator sends out a check to a MR owner. The MR owner does not cash the check. (Death, dismemberment, incorrect address, carelessness…etc.) Does the person still owe the county taxes on the payment?
If a tax ticket is created and same person does not pay the taxes, should the taxes be sold at auction for said taxes? How can you owe taxes on my one you didn’t receive?
So, should the operator be able to purchase said rights? If so, what system is in place to ensure that they actually mailed the checks to the correct people in the first place?
But, if it produces no income then there should be no taxes?? You don’t pay taxes on things you leave in an investment account until you make withdraw? If you draw no income, must there be taxes due?
You are wrong, taxes due, regardless of production. These are real estate / property taxes, versus income tax. You pay taxes on the property your home sits on and there is no income on that.
In addition, if you live out of state and receive any income on production, you are required to file income taxes with the State of WV.
You are welcome to email me directly if you have any additional question.
The county does not inform you, contact you, or any heir as long the taxes are paid. If an heir dies, the son, daughter etc. has to contact the oil company with all the info to get the heir corrected if there is a lease/well. If no lease/well the executor of the estate has to get the paperwork/will filed through the courthouse to transfer ownership. Sadly this does not always happen. My wife has paid the taxes for everyone who is an heir to her property. She paid them for her dad for years when he was the “agent” My wife kind of inherited the tax tickets after her parents passed away. If we were to contact all 16 or so heirs and told them the situation, they would think we were trying to con most of them. We hope to get the tickets separated at some point so we won’t end up with a large tax increase someday. Thanks to Nancy for checking into that for us.
Officially, you are liable for all property taxes on any parcels, producing or non-producing. I have found the DC tax department to be ‘lacking’ at best.
Failure to pay taxes will result in the parcel being sold at auction and an operator must bid at the auction, like everyone else, unless there is a clause in the lease, that gives them the right to pay off past due taxes.
You would not believe the number of people that inherit parcels in which they are unaware.
Let me state, I am not an attorney, nor tax specialist, any advice given is from a layman’s point of view.
It is my understanding; property taxes are calculated by averaging the two prior years of income.
e.g., the 2015 property tax is based on the production during the years of 2013 & 2014. One issue that I have seen repeatedly is a mineral owner receives large royalties on the initial production of a Marcellus Well in 2013, 2014 then suddenly receives a property tax bill in the thousands of dollars for 2015. As we have seen, the drop in prices has affected our royalty payments and many failed to consider this, when the initial checks arrived in the mail.
I recommend anyone that suddenly finds themselves in the fortunate position of a drastic increase in royalties, to speak with an attorney, tax or financial advisor, early on. It is much easier and less expensive to be proactive, than reactive.
Traditionally, Antero only remits a Division Order on new leases, not pooling agreements. If you call their Colorado office (303 357-7310) and ask for the Royalty Hotline, they will be able to assist you.
Wilson, wouldn’t each unit for a horizontal well need a division order since the % would be different for each unit instead of multiple vertical wells on a leases acreage where the % would remain the same?
Excellent question! It depends on the pooling modification and the exact terminology. Not to evade your question, but it seems I answered the prior question without considering all the factors.
Wilson most all my leases (so far) have a clause that stipulates payment within 6-months, however they never make it and especially now, although I have received a 3% late charge fee, not much but I will take it. What you are suggesting is always worth a try, I’am just saying that Companies are now choking their wells and I am in favor of that until the price of Nat’l Gas is over $3.00. My Royalty Checks are now so low that i would rather wait for a year, lot’s of other folks on this forum will tell you the same.
Vicky, issuance of Div Orders are now out at least 15 months after production. and if course the low pricing of Nat’l Gas has a lot to do with that. I am sorry you will probably have to be patient and wait like the rest of us, If you have the api # you might do as Wilson suggested and call the hot line in Denver.
If you sign another Pooling Modification in the future, look into adding a set time limit from the time of production, in which they must pay the first royalty and supply a division order. Set a specific interest rate that must be paid, if they fail to pay promptly. I have been fortunate with Antero and they have paid interest on monies due.
vicky , I waited over a year after the well went on line before receiving my first D.O and that was 6 months ago, the timing has really moved out since then.
Interesting article in the Doddridge County Independent, It’s a lengthy post but I will try to hit on some interesting paragraphs: Antero spending $1 B employing 2000 in Wv In 2015. Our developing plan is for the next “30 years”, we are committed to the long term. We are not the first guy in but we hope to be the last guy out. Antero’s primary area of operation in WV is US route 50 from Bridgeport to Parkersburg and north into Tyler and Wetzel counties. I Don’t have much room for more so suggest getting and reading from the Newspaper.
Hey folks why the lost of interest, I am still getting royalty (such as it is), Antero is committing to 30 years of drilling in our Area, and in the latest Independent (newspaper Doddridge) 23oct, Antero Resources is applying to drill a whole bunch of wells in Grant, Central, West Union District, New Milton, etc, and I am still receiving offers to buy my interest in minerals, so all is not lost and let’s hear from you people,"I know you are out there.