Printable Format79-330. Oil and gas properties; valuation and assessment; cancellation of taxes of less than $5. In valuing for taxation, oil or gas properties consisting of one or more leases and oil or gas wells, there shall, in addition to the value of all oil- or gas-well material in or upon the leasehold properties, be made such valuation of the oil or gas wells as would make a reasonable and fair value of the whole property. Such portion of the valuation of the oil or gas wells as represents the lessor's interest, or royalty interest, therein shall be assessed to the owner thereof and the remaining portion or working interest therein shall be assessed to the owner of the lease, together with the other property assessed in connection therewith. When the aggregate amount of tax owed by any taxpayer on any such royalty interest or royalty interests having a tax situs in the same taxing district is less than $5, such tax shall be cancelled and the amount shall not be included on the personal property list. Upon the written request or consent submitted annually prior to April 1 by the owner of a gas lease where the gas is being delivered into interstate commerce, the entire valuation may be assessed to such owner.
History: L. 1917, ch. 323, § 2; R.S. 1923, 79-330; L. 1977, ch. 326, § 1; L. 1977, ch. 327, § 1; L. 1992, ch. 282, § 17; May 28.
Law Review and Bar Journal References:
Case in annotation No. 4 below discussed in 1959-61 survey of taxation law, Leslie T. Tupy, 10 K.L.R. 305, 306 (1961).
"Sustaining the Unsustainable: Oil and Gas Development in the 21 st Century," David E. Pierce, 23 Kan. J. L. & Pub. Pol'y, No. 3, 362 (Spring 2014).
Attorney General's Opinions:
Taxation; property valuation, equalization; assessment; records open to public inspection. 85-36.
CASE ANNOTATIONS
1. Royalty interest is personal property and taxed as personal property; royalty and mineral interests distinguished. Rathbun v. Williams, 154 Kan. 601, 604, 121 P.2d 243.
2. Royalty interest taxable hereunder; instrument construed to convey royalty interest. Hickey v. Dirks, 156 Kan. 326, 328, 133 P.2d 107.
3. Discussed; levy of execution of royalty assignment held invalid. Robison v. Robison, 165 Kan. 494, 499, 196 P.2d 159.
4. Under facts, oil and gas interest of Federal Land Bank taxable; immunity. Federal Land Bank v. Board of County Commissioners, 187 Kan. 148, 150, 155, 354 P.2d 679. Reversed: 368 U.S. 146, 82 S. Ct. 282, 283, 284, 7 L.Ed.2d 199.
5. Leasing city owned property for oil and gas lost exemption. City of Arkansas City v. Board of County Commissioners, 197 Kan. 728, 729, 420 P.2d 1016.
6. Assessment and valuation of property are administrative in character; absent evidence that assessment was arrived at fraudulently, arbitrarily or capriciously, a difference of opinion as to value does not warrant judicial interference. Cities Service Oil Co. v. Murphy, 202 Kan. 282, 284, 293, 447 P.2d 791.
7. Cited in determining tax status of certain municipally owned property. Board of Park Commissioners v. Board of County Commissioners, 206 Kan. 438, 439, 442, 480 P.2d 81.