Income taxes are not automatically withheld from your royalty payments. By law, we are required to withhold Colorado severance tax, Colorado conservation tax, and property tax (also called ad valorem tax). The amounts withheld are identified on the detail that is mailed with your check. You will find a legend on the last page of the detail that describes all the codes.
Federal backup withholding may be initiated if your SSN or TIN is not on file with Extraction at the time of payment. Any applicable federal withholding would be reported in box 4 on your 1099-MISC.
