It was my impression that all newly drilled horizontal wells, including Haynesville & Bossier wells, are exempt from Severance tax for 2 years or until well payout, whichever comes first. Has the Louisiana legislature changed this recently to anyone's knowledge. I am a mineral owner in two initial production Haynesville wells drilled by BHP and severance tax was withheld.
When I questioned it through the Royalty Relations Dept., I received an email stating: "All owners are subject to severance tx except tax exempt entities". She then quoted Exhibit A of my lease which allows them to deduct Severance tax.
Am I right about this?
Typical stock answer that doesn't address the issue. The Deep and Horizontal severance tax exemptions do not kick in until the operating company submits their well cost paperwork and it is reviewed and approved by the state. That can be many months after first production. When the exemption is approved the company, and their royalty recipients, will be reimbursed for the months that the well production was liable for severance tax. Here is the kicker, the operating companies not only get the tax reimbursement amount, they get interest on it.
Spring Branch, I think we would all like to know if royalty recipients also receive reimbursement that includes the interest paid by the state. We would appreciate if you would ask royalty relations if the severance tax reimbursement you received included any interest.
I will gladly do that if, as, and when I receive reimbursement for the withheld severance tax.
You're welcome. You'll have to keep a close watch to see when you get a refund. If you can't get a straight answer regarding the interest question from Royalty Relations, let me know. I have been interested in an answer to this question for some time.