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
  • Coal

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.