Oil and Gas Information

Mineral interests in WV are taxed the same as your home. You will pay 60% of the appraised value on the minerals at the levy rate for your county. The value of these minerals in based on WV Code procedures and is the same for all counties in WV.

Minerals are taxed at a minimum value until production begins. Once production begins, the assessed value for both the working interest and royalty interest will increase, sometimes substantially, because the assessment is then based upon the amount of income generated to the producer, and the amount of royalties paid to the property owner. This income information is supplied to the West Virginia State Tax Department by operator of the well which is then sent to each of the counties. However, it is The State Tax Department, not the Assessor's Office, whom uses this income information to determine the assessed value.

WV appraisal values for minerals are based on the start date of drilling and production income. The calculation also involves yield capitalization, discount rate, use of decline rate factors for the well area, well expenses and the producing formation. The appraised value (what it’s worth) of the royalty interest usually equals 2-5 times the amount of one year’s income. The assessed value (what you pay taxes on) would then be 60% of that amount. Please note that there is a 2-year delay in reporting Royalties. For example; production year 2018 is reflected on the 2020 tax year.

A quick calculation you can use to estimate your mineral taxes is “Income x 4 x 60% x levy rate”. Please note that this calculation will not give you an exact amount for taxes and it will be a little high but it gives you a ballpark idea on what your taxes could be. Just be sure to plan, save and budget for your future mineral real estate tax bill.

Please note that the appraisal is based on Gross Production – not your net royalty check. If your lease allows for deductions and the producer withholds amounts for post-production costs your real estate taxes are based on the gross before deductions not what you actually receive. Each horizontal well is appraised separately.

You can use the WV DEP website to search well production data by month. After searching and locating the well leg you can view the monthly well production data that is submitted to the State of WV.