Oil and Gas Severance Tax billing notices

The Colorado Department of Revenue will soon send tax-billing notices to encourage Oil and Gas Severance taxpayers to file their 2007 returns.

Under state law, the Department of Revenue is obligated to enforce the filing of oil and gas severance tax returns with the state. The department recently implemented a program to contact about 3,300 individuals whom the department determined had a 2007 severance tax filing requirement, but had not filed.

To date, about 2,400 taxpayers have filed a return or resolved this issue. Of those, some filers owed tax but many received refunds from the state. About 900 recipients of the department’s previous notices have failed to take action. The state encourages those individuals to file their severance tax return or contact the Department to resolve their status.

Colorado state severance tax forms are available on the Internet at www.TaxColorado.com. Those with questions should call the Department at (303) 238-SERV (7378). Taxpayers refusing to file a return could face collection activity, including liens against property or garnishment of wages and/or bank accounts. Severance tax is derived from the extraction of non-renewable resources, including minerals, oil and gas, from Colorado lands. Skyrocketing commodity prices and the unique nature of the Colorado ad valorem tax credit boosted oil and gas revenues substantially in 2007. Severance tax revenues help communities mitigate the impacts of oil and gas development. The state of Colorado collected more than $150 million in severance tax during 2008.