Who Must File Return DR 0021:
Anyone who receives taxable income from oil or gas produced in Colorado. If you own a working interest, or a royalty interest in any oil or gas (including carbon dioxide) produced in Colorado, you must pay severance tax to the State of Colorado. Severance tax might be due even though you do not realize a net profit on your investment. A partnership, LLC or S Corporation must file at the entity level. Partners, members, or shareholders do not file a severance tax return to report oil and gas income received by the pass-through entity.