Property Tax Credit

[Jiffy]

You just told me.

 

[Sluggo]

I just keep paying whatever they tell me I owe.

That was sarcasm

 

[Allen]

why don't mineral right owners have to pay taxes on it yearly? mineral rights have value just like surface rights have value and homes have value.

The original deal was to use production and extraction taxes instead of a property tax in ND. Current production and extraction taxes are 10% and goes up to 11% if the price of oil gets high enough. They also pay up to 2.5% ND income tax on that income. So, that's up to 13.5% tax that goes straight to ND. And, of course, one also has to pay Federal income taxes on any royalties. If one is fortunate, they will hit the highest federal marginal tax rate of 37% and that doesn't include the 3.8% Net Investment Tax brought to you courtesy of Obama Care. In a nutshell, those who receive a lot of royalties can reach a marginal tax bracket of 54.3% in 2024.

 

[Obi-Wan]

The original deal was to use production and extraction taxes instead of a property tax. Current production and extraction taxes are 10% and goes up to 11% if the price of oil gets high enough. And, of course, one also has to pay income taxes on any royalties. If one is fortunate, the marginal tax rate in royalties is 48% and that doesn't include the 3.8% Net Investment Tax brought to you courtesy of Obama Care that is also applied to royalty income. In a nutshell, those who receive a lot of royalties can reach a marginal tax bracket of 51.8% in 2024.

my point is if they had to pay "mineral tax" yearly based on accessed value it would help offset the surface tax. People wouldn't sit on the mineral rights just incase the minerals were ever mined if it cost them yearly to do so. Isn't this the very same thing that the anti no property tax group claimed would happen to surface property if there were no taxes, and that it would be unfair. what ever happened to what is good for the goose is good for the gander.

 

[Allen]

my point is if they had to pay "mineral tax" yearly based on accessed value it would help offset the surface tax. People wouldn't sit on the mineral rights just incase the minerals were ever mined if it cost them yearly to do so. Isn't this the very same thing that the anti no property tax group claimed would happen to surface property if there were no taxes, and that it would be unfair. what ever happened to what is good for the goose is good for the gander.

Problem is how to determine the value of mineral acres ahead of the discovery of oil, or some other recoverable mineral. We have gravel deposits on our land. They've been known about for years. A little over 20 years ago when a gravel company finally wanted to develop them, they came in and for archeological reasons the gravel became worthless. The oil out west in the Bakken was known to exist but considered worthless for at least 40-some years because it couldn't be economically produced, so a mineral acre of the Bakken was in all practical sense worthless. Now, in reality some would pay a few bucks an acre for the minerals if they bought the land in the hope that something would eventually change, but often it was just so they could say they owned them.

In this example I think the swap of a property tax on something that can't be accurately assessed, for excessive taxation on income from that property is probably a reasonable solution to most. Hence, why the legislature codified it into law.

Let's put it this way, you live in Burleigh county. I am going to guess you own the minerals to your place. That being the case, what would you suggest they are worth and would you like to pay property tax on them? Remember, sand is absolutely a resource that can be valued and mined. As are rocks, trees and XXXX.