Attention, all Taxation Division offices will close at 3 p.m. Thursday, May 9. Offices will reopen at their normal times on Friday, May 10.

 
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Oil & Gas Severance Tax | Owners & Operators

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  • Open and maintain a Colorado oil and gas severance withholding tax account with the Colorado Department of Revenue.
  • Withhold 1% from the gross income disbursed and electronically remit withholding to the department monthly.
  • File with the Department an annual reconciliation of withholding.
  • Notify each interest owner annually of the amount of severance tax withheld from his/her interest payments.
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Exception

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 0021W for the calendar year is less than $250, and
  2. The producer has withheld sufficiently from royalty or production payments to cover the severance tax liability.
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For more information, visit the Filing Information web page and review FYI Withholding 4: Colorado Oil and Gas Severance Withholding Requirements.