quadrennial 2011 oil and gas state assessed & personal property

Quadrennial 2011

Oil and GasState Assessed &Personal Property

John Lefebvre - Weld County Treasurer

Oil and Gas CRS 39-10-106


Unit Operator Responsibilities

The unit operator shall collect from the owners of the fractional interests and remit to the treasurer the tax levied against the entire unit.


Unit Operator Collects Taxes

The unit operator may deduct from royalty payments made to any fractional interest owner the estimated amount of the tax to be paid by such fractional interest owner


Unit Operator Responsibility

Failure of the unit operator to remit to the treasurer the tax levied against the entire unit shall make the unit operator liable for such tax.


Unit Operator Escrow

The unit operator shall open an account in A federally insured bank Located in the state of Colorado Requires two signatures

One shall be the signature of the treasurer


Escrow Account Ownership

- Such account shall be owned by the owners of fractional interests in the unit

- But the unit operator shall be responsible for managing such account


When Funds Are to be Deposited

The moneys shall be deposited in such account within 30 days from the date the unit operator receives payment for the sale of any oil or gas from such lease.


Treasurer May Waive Escrow Requirement

Waive the requirement of placing the tax in such account or fund as required in paragraph (a) of this subsection (3.5) and allow the unit operator to file a statement with the treasurer declaring that a sufficient amount of moneys or other assets is available to ensure the payment of the tax if:


Waiver Conditions

The unit operator has made timely payment of the tax the previous 3 property tax years

The unit operator has been in operation in the county for less than 3 property tax years and has made timely payment of the tax to the treasurer during such period of time; or

The unit operator has been in operation in the county for less than 1 property tax year.


Plugged and Abandoned Wells

Upon completion all moneys remaining after full payment of all ad valorem taxes due on the unit shall be distributed to the owners of fractional interests in the unit based upon each owner's proportional contribution to the moneys remaining in the account


Remedies and Restrictions

May utilize all lawful collection and enforcement remedies against the owner of any fractional interest to collect the tax owed by such owner

But an owner shall not be subject to penalty or interest upon the tax owed unless he fails to remit such tax within 20 days after notification of the default of the first purchaser or unit operator


Notice by Registered Mail

The treasurer shall send a notice by registered mail to the first purchaser of the amount of such delinquent taxes and the name of the unit operator owing such delinquent tax


First Purchaser

The first purchaser shall withhold payments to the unit operator owing the taxes of any of the proceeds of the sale of any oil and gas.

The first purchaser shall remit such withheld payments to the treasurer until the amount of such taxes and penalties are paid in full.


If First Purchaser Failures to Remit

The first purchaser shall remain liable for the amount of tax owed

The treasurer may utilize lawful collection and enforcement remedies and procedures against any first purchaser

Scott Mason's first rule of business law


Withheld But Not Remitted

The tax liability of the owner of any fractional interest in such unit whose proportionate share of tax was withheld from royalty payments by the unit operator but not remitted to the treasurer shall be deemed satisfied to the extent of the amount withheld, and such owner shall not be subject to any collection and enforcement remedies and procedures provided by law.


Big Time Felony

Any unit operator or first purchaser who has collected the tax from the fractional interest owners pursuant to the provisions of this section but has failed to remit such tax collected commits embezzlement, as defined in sections 18-4-401 and 18-4-403, C.R.S.


In Kind Use and Inaccurate Data

The unit operator shall not be liable for any tax levied against any production taken in kind from the property for which the fractional interest owner taking production in kind provided inaccurate information regarding net taxable revenues to be used for tax reporting.


Notice First Purchaser

The treasurer shall send a notice by registered mail to the first purchaser of the name of the unit operator owing such tax and the amount the first purchaser shall withhold from any of the unit operator's proceeds of the sale of any oil and gas from such lease.


After Noticing First Purchaser

After receiving such notice, the first purchaser shall withhold payments to the unit operator of any of the proceeds of the sale of any oil and gas from such lease.


Remit to Treasurer

The first purchaser shall remit payments to the treasurer until the tax is paid in full


First Purchaser Remains Liable

If the first purchaser fails to collect the tax or the first purchaser fails to transfer the tax to the treasurer pursuant to paragraph (a) of this subsection (4.5), the first purchaser shall remain liable for the amount of tax owed


Proceed Against First Purchaser

The treasurer may proceed against any first purchaser to collect the amount of taxes owed.


State Assessed

The State has determined that it has greater expertise than the local Assessor in assessing the value of certain types of property– Railroads– Utilities– Cell Towers


State Assessed Collections

Remedies are the same as Personal Property


Personal Property

Any business asset that is used to make a profit

CRS 39-10-110 to 113


Personal Property

Take partial payments Monitor all auction houses for sales of

businesses in your jurisdiction Issuing distraint warrants Organize list from largest to smallest


Payment Plans The payment plan shall

specify:

The amount due

– tax levied

– interest

– penalties

– fees The amount of each

payment; and payment due dates


Maximum Payment Plan

Shall be paid in full no later than 24 months from the date the owner of the personal property enters into a written payment plan


Payment Plan Termination

The treasurer may terminate the payment plan if the owner of the personal property fails to abide by the terms and conditions of the plan.


Collection Actions

After October 1st the treasurer shall enforce collection of delinquent taxes on personal property by:

– Commencing a court action or

– Employing a collection agency or

– Distraining, seizing, and selling the property


Distraint Warrant

A distraint warrant shall be served by the sheriff or a commissioned deputy or, at the discretion of the sheriff, by a private server of process hired for the purpose


Cost of Warrant Service

Any cost incurred as a result of hiring a private server of process shall be paid by the sheriff's office, and the cost shall not exceed the amount specified in section 30-1-104 (1) (a), C.R.S.


Property Leaves the County

When personal property is moved to another county in the state, the treasurer of the county levying the tax may issue a certificate to the treasurer of the county to which the property has been moved


Seized Property Procedure

The treasurer shall:

– Make a list of property

– Deliver a copy to the owner and to any lienholder of record

– Change the locks

– Plus a statement of the amount demanded

– Notice of the time and place of the sale


Must Conduct Sale

No later than 180 days after the seizure of any personal property


Notification

Notice containing a description of the property

The reason its being offered for sale

The time and place of the sale in a newspaper published in the county


10 Days From Publication

The sale shall not be more than 10 days from the date the notice is first published

The sale may be adjourned for any reason

In no event shall the sale be postponed for more than 30 days from the date the notice is first published


Minimum Bid

Includes the taxes, delinquent interest, and costs of making the seizure and advertising the sale


Failure to Make Min. Bid

If the amount bid at the sale is not equal to the minimum price, the treasurer shall declare the property purchased by the county at the fixed minimum price

It shall be sold within 150 days by the BOCC


Treasurer May Direct the Auction To:

Sheriff or A professional

auction firm


Certificates of Purchase

A certificate of sale shall be issued to each purchaser which shall be prima facie evidence of the right of the treasurer to make such sale and conclusive evidence of the regularity of the proceedings in conducting the sale


Surplus Proceeds

Any surplus sale proceeds over and above the taxes, delinquent interest, and costs of making the seizure and advertising the sale shall be paid over to the owner and a written account of the sale furnished him


Be Considerate of Others

City State IRS Chain of Title

quadrennial 2011 oil and gas state assessed & personal property

Documents

taxesthe unit operator

unit operator liable

entire unit

tax owed

owners of fractional

timely payment

account ina

registered mailthe treasurer