Colorado Oil and Gas Royalties - Colorado State Severance Tax Form DR0021

THIS IS AN ARTICLE IN DEVELOPMENT:

Notes:
-  Anyone who receives oil and gas royalties needs to file a CO State Severance Tax form DR0021
-  Producers will send withholding information on form DR0021W by March 1st of the following year.
-  Oil and gas royalties pay both income tax and co state severance tax.
-  Severance tax for prior years can be paid at any time but only refunds can be claimed from the last 3 years.
- Severance tax cannot be used as a tax credit on your Colorado Income Tax return.
- Severance tax refund must be reported as income on your Fed and State Income taxes.


Must file DR0021 and DR0021D

Exception To File:
It is not necessary to file a severance tax return if you meet both of the following conditions:

1. the total gross oil and gas withholding on form(s) DR 21W for the calendar year is less than $250; and

2. the producer has withheld sufficient severance tax from your royalty or production payments to cover your severance tax liability.


REFERENCES:
https://www.colorado.gov/pacific/sites/default/files/General4.pdf
https://www.colorado.gov/pacific/sites/default/files/DR0021W.pdf
https://www.colorado.gov/pacific/sites/default/files/DR0021BOOK.pdf