Call both of your Senators and your Representative from where you vote.  This may be different from where your mineral estate is located.  Your Senators and Representative want to hear from their constituents.  While their actions will impact the nation, they only want to know what is important to who they represent in Congress. Find Your Members of Congress

Speaker Nancy Pelosi has stated the House is very close to getting the Democrats onboard with their bill.  Most of the discussion is focused on what the bill will do, but not as much on how the bill is funded.  The final language in the bill has not been released and the cost to taxpayers is expected to be around 2 trillion dollars. There is still a lot of horse-trading taking place, both on the spending and the revenue sides. While there are reports some of the items listed below are not in favor to pass, we have all seen the surprises that can come out of a huge bill like this one.

Here are the items your PAC committee and National Board have taken positions on:

  1. Save Percentage Depletion Allowance as it is today.
  2. Do not increase Capital gains tax by eliminating the step up in basis at the time of death, especially when the property has not been sold.
  3. Do not lower the estate exemption for individuals or couples.
  4. Domestic Security is vital to our country and a key element is our energy independence.  Oil and Gas are critical to our country remaining energy independent from foreign energy sources.

TIPS For Your Call – Our Senators and Representative are very busy and the best way to voice your concern is by a phone call.  When you call, please ask for the staffer that handles Energy or Taxes. Keep the conversation short but direct.  Of course, if they engage with you then elaborate more on how you are specifically impacted.  Describing how these points affect you personally will impact their decision.

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Thank them for taking your call and tell them you are a royalty owner that lives in their state/district, and name the city and state you live in.

Percentage Depletion Allowance Elimination

  • Will increase taxes on the elderly using their royalty income to supplement their social security.
  • Will increase taxes on millions making less than $400,000 per year.
  • Oil and Gas are non-renewable natural resources and Percentage Depletion Allowance allows us to depreciate our asset over time.
  • It is an unfair increase in taxation of the middle-class family that is already feeling large tax burdens.
  • Percentage Depletion Allowance is NOT a subsidy for “Big Oil”, only small operators and royalty owner meet the criteria for taking the 15% allowance.
  • Big Oil and Gas companies take Cost Depletion which is not under consideration to be removed from the tax code.

Elimination of the Step up in Basis at the time of death or imposing capital gains even if the property has not been sold (currently, the deceased’s assets receive a step up in basis to the current fair market value at the time of death and capital gains taxes are only owed if the property is actually sold.):

  • This will create a huge tax burden on millions of royalty owners, as the tax will be due at the time of death, even if the asset(s) were not sold.
  • Mineral estates that create royalty income are generational and many families will lose these assets to pay this large tax burden on the deceased estate.
  • Determining the original basis of these assets will be nearly impossible since they have been in the family for generations.
  • The income produced over these generation has already paid their fair share of taxes.

Decreasing the Estate Exemption
(for an individual going from $11.5 Million to $5 Million)

  • This will cause families and family run businesses to sell their minerals, royalties, farms and ranches to pay estate taxes.

Domestic Security by Remaining Energy Independent

  • Recent calls to OPEC and to Russia to increase production of oil and natural gas, while discouraging production in the U.S., is the opposite of what our country needs.
  • We need to increase our use of domestic production, not import foreign oil.  This defeats decades of work to increase our domestic security by becoming energy independent.
  • This tactic only enriches our adversaries, weakens the U.S., and makes us less energy secure.