What is Severance Tax?
Colorado Severance Tax is a tax imposed upon nonrenewable natural resources that are removed from the earth. Natural resources that are subject to severance taxation include:
- Metallic Minerals
- Molybdenum (Ore)
- Oil and Gas
- Oil Shale
Anyone who receives income from oil and gas production and mining of nonrenewable natural resources must file a severance tax return. Severance tax might be due even though you do not realize a net profit on your investment.
Please review FYI General 4: Severance Tax Information for Owners of Any Interest in Any Oil and Gas Produced in Colorado for more information on Oil & Gas Severance Tax.