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(06/19/15) Colorado Severance Tax Booklet THIS BOOKLET CONTAINS: DR 0021 Oil and Gas Severance Tax Return DR 0021D Oil and Gas Severance Tax Computation Schedule DR 0021S Application for Extension.

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How to fill out the Colorado Dr 0021 online

This guide provides clear and comprehensive instructions on how to complete the Colorado DR 0021 online. It is designed to assist individuals and entities that receive taxable income from oil and gas produced in Colorado, ensuring a smooth filing process.

Follow the steps to fill out the Colorado DR 0021 online.

  1. Click ‘Get Form’ button to obtain the form and open it in the editor.
  2. Enter your personal or business information in the designated fields. This includes your name, address, Social Security number or Colorado account number, and for businesses, the Federal Employer Identification Number (FEIN). If filing jointly, include your partner's details as well.
  3. Indicate the actual tax year that corresponds with your filing period. Ensure that this matches the period used for your federal income tax.
  4. Complete the schedule DR 0021D to calculate your severance tax. Input your gross income from oil and gas production and the ad valorem taxes if applicable.
  5. Return to the DR 0021 form and enter the net tax from line 1 of your DR 0021D. This is crucial for accurate assessment of your severance tax liability.
  6. Attach the completed DR 0021D and any required withholding statements (form DR 0021W) to your return. Missing attachments can delay processing and refunds.
  7. Fill out sections regarding estimated tax and extension payments if applicable. Ensure all figures are rounded to the nearest dollar.
  8. Review all entries for accuracy, then sign the form. If filing jointly, both parties must sign.
  9. Save changes, download, print, or share the form as needed before mailing it to the Colorado Department of Revenue at the designated address.

Complete your Colorado DR 0021 online today to ensure timely compliance with state tax regulations.

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Taxes on Oil and Gas Production As a primary approach, states have imposed taxes and fees on the extraction, production and sale of natural gas and oil. These severance taxes taxes applied to materials severed from the ground tax the extraction or production of oil, gas and other natural resources.

Severance tax is a state tax imposed on the extraction of non-renewable natural resources that are intended for consumption in other states. These natural resources include such as crude oil, condensate and natural gas, coalbed methane, timber, uranium, and carbon dioxide.

Most (but not all) oil producing states levy a severance tax on its oil production. This tax is based on either the volume or value of the production. Royalty and mineral owners pay their pro rata share of these oil severance taxes.

Summary. An ad valorem tax is a tax that is based on the assessed value of a property, product, or service. The most common ad valorem tax examples include property taxes on real estate, sales tax on consumer goods, and VAT on the value added to a final product or service.

Severance taxes are taxes on the extraction of natural resources such as oil and natural gas. These taxes constitute only a small percentage of state and local general revenue nationally, but are often a substantial share of revenue in a few, natural resource-rich states notably, Alaska, North Dakota, and Wyoming.

Examples of severance taxes Production volume tax: This type of tax is levied on the volume of oil and gas produced. For oil, it can be levied per barrel of oil. ... Production value tax: This type of tax is levied on the value of the produced oil or natural gas.

DR 0021W -Oil & Gas Withholding Statement -Severance Tax Withheld from Oil Shale and Oil/Gas Payments. DR 0021X- Amended Colorado Oil & Gas Severance Tax Return. DR 0206 - Computation of Penalty Due Based on Underpayment of Colorado Severance Estimated Tax.

In Colorado, owners of producing oil and gas wells are liable for taxes at both the local and state level. ... (Ad Valorem Credit) allows taxpayers to claim a credit of 87.5 percent of the property taxes assessed or paid to a local government on oil and gas produced to offset their state severance tax liability.

Sixteen states and the District of Columbia do not levy severance taxes. California does not have a severance tax but levies an assessment fee on oil and gas produced in California, and Census records this as severance tax revenue. Alaska typically depends on severance tax revenue more than any other state.

In the state of Colorado, severance taxes may be withheld and remitted to the State an owner's behalf. If applicable, an owner will receive a DR21-W tax form showing various revenue and any severance tax withheld during the previous calendar year.

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