(Sheridan, Wyo) The Powder River Basin Resource Council released a new report titled Tax Delinquencies and Budget Deficits: A Case for Reform. The report, which tracked delinquent mineral taxes in 12 counties from 2006 to 2016, found that the state of Wyoming is owed over $42 million in county taxes.
The report’s recommendations are:
· Counties should collect ad valorem mineral taxes on a monthly basis to prevent large-scale debts from accumulating in an energy downturn.
· Counties should be able to lien all ad valorem taxes, which would place counties higher on the list for collection during bankruptcy proceedings.
· The state should establish a funding pool or allow access to the Federal Natural Resource Policy Account to assist counties during bankruptcy proceedings.
· Legislation should allow the Wyoming Oil & Gas Conservation Commission and the Department of Environmental Quality to consider a company’s state and county tax debt in Wyoming before allowing the sale or transfer of assets.
At the state level, severance taxes (collected when minerals are severed from the ground) are collected on a regular, monthly basis, as minerals are produced. At the county level, however, “ad valorem” taxes (taxes on mineral production) are collected only annually, with an average lag time of around 18 months from the time of mineral extraction to tax collection. As the report puts it, “A lot can happen in 18 months.”
DELINQUENT MINERAL PRODUCTION TAXES BY COUNTY
Copies of the report were sent to the Wyoming State Legislature and Governor Mead.