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Taxes

Severance

YearRevenue
2000 $36 million
2001 $69 million
2002 $51 million
2003 $26 million
2004 $119 million
2005 $143 million
2006 $211.8 million
2007 $136.9 million
2008 $151 million
2009 $285 million

Colorado Severance Tax is a tax imposed upon nonrenewable natural resources that are removed from the earth. Natural resources that are subject to severance taxation include:

  • Metallic Minerals
  • Molybdenum (Ore)
  • Oil and Gas
  • Oil Shale
  • Coal

If you are a producer or own a working interest, a royalty interest or any other interest from any oil and gas 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.

The severance tax is graduated, ranging from two percent for income under $25,000 to five percent for income of $300,000 and over. Very small operations are exempt. A credit is allowed against severance tax equal to 87.5 percent of all ad valorem taxes paid or assessed during the tax year.

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