August 27, 2001
CLIENT ALERT
As a client of PetroAcct and a courtesy to future clients, we would like to inform you of the newly amended Oklahoma royalty withholdings requirements. The new requirements have been extended to all persons rather than just nonresident individuals. This change was made into law with the enactment of SB 495 under 68 O.S. 2385.25 et. seq. and is effective July 1, 2001. Below is an extract of the Oklahoma Tax Commission notice:
The term "person" is defined in Oklahoma statue as any individual, partnership, corporation, association, governmental subdivision, or public or private organization of any character other than an agency. The new withholding requirement is effective for all royalty payments made after July1, 2001. The withholding rate is six and three-quarters percent (6.75%) of the gross royalty. The monies withheld are required to be remitted to the Oklahoma Tax Commission on a quarterly basis with the first remittance due on October 30, 2001.
There are four entities that will be exempt from the withholding on oil and gas royalty distributions. These four include 1) current or permanent residents of Oklahoma; 2) the United States, any state or federal agency or political subdivision; 3) any charitable institution; or 4) any federally recognized Indian tribe.
If you have any questions on this topic please contact your Client Manager or the Oklahoma Taxpayer Assistance Division at (405) 521-3160. We thank you for your business and opportunity to assist you with this issue.
Respectfully Yours,
J. Michael Tissue
Executive Vice President
