Colo. Code Regs. 39-29-105-1

Current through Register Vol. 47, No. 19, October 10, 2024

Rule 39-29-105-1 - Liability for Severance Tax on Oil and Gas

Basis and Purpose. The statutory bases for this rule are sections 39-21-101(3), 39-21-112(1), 39-29-101(1), 39-29-102(3), 39-29-105, 39-29-111, and 39-29-112, C.R.S. The purpose of this rule is to clarify the imposition of, and liability for, Colorado severance tax on oil and gas.

(1) Except as provided in paragraph (2) of this rule, the severance tax levied on oil and gas pursuant to section 39-29-105, C.R.S., shall be imposed on any person owning a working interest, royalty interest, a production payment, or any other interest in any oil or gas produced in Colorado. In the case of any interest owned by any partnership, S corporation, limited liability company, joint venture, or any other entity treated as a pass-through entity for federal income tax purposes, the severance tax on oil and gas is imposed on such entity and not on the partners, shareholders, or members of such entity.

(2) No severance tax shall be imposed pursuant to section 39-29-105, C.R.S., with respect to:

(a) any interest in oil and gas held by the United States of America;

(b) any interest in oil and gas held by the State of Colorado or any political subdivisions of the State of Colorado;

(c) any interest in oil and gas held by the Southern Ute Indian Tribe or the Mountain Ute Indian Tribe; or,

(d) any production deemed exempt pursuant to section 39-29-105(1), C.R.S.

39-29-105-1

43 CR 23, December 10, 2020, effective 12/30/2020