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A common example of this is the taxation of oil and natural gas royalty interest revenue. In order to ensure that the state receives a portion of the revenue from oil and gas leases within the state, any payments made to an address outside of the state require that a tax be withheld and paid directly to the state.
A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset or a fixed price per unit sold of an item of such, but there are also other modes and metrics of compensation.
The traditional royalty rate for oil and gas in the United States was one-eighth (12.5 percent), although today it is often higher. Some states, such as Pennsylvania and West Virginia, have set the legal minimum royalty for private oil and gas leases to one-eighth. [14] [15]
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The Oil and Gas Fiscal Regimes described how royalty payments were calculated: [20]: 30 After an oil sands royalty project reaches payout, the royalty payable to the Crown is equal to the greater of: (a) the gross revenue royalty (1% - 9%) for the period, and (b) the royalty percentage (25% - 40%) of net revenue for the period.
In the United States, simple ownership of mineral rights is possible, and royalty payments to individuals are quite common. [9] [10] Local taxing authorities may levy a severance tax on non-renewable natural resources extracted or withdrawn within their authority. The federal government receives royalties for mining on federal lands, which is ...
Mineral owners may receive a monthly royalty check if oil, gas, or any other substances of value are extracted from below the surface and either sold or used by an oil and gas operating company. Royalty statements include the production and revenue figures for both the individual owner and the entire well. The royalty paid is a function of the ...
Eastern American Natural Gas Trust Announces Agreement for Sale of Royalty NPI AUSTIN, Texas--(BUSINESS WIRE)-- Eastern American Natural Gas Trust (the "Trust") (NYS: NGT) announced today that it ...