December 10, 2017

Colorado Supreme Court: County Assessor Authorized to Retroactively Assess Property Taxes on Oil and Gas Leaseholds

The Colorado Supreme Court issued its opinion in Kinder Morgan CO2 Co., L.P. v. Montezuma County Board of Commissioners on Monday, June 19, 2017.

Oil and Gas—Property Taxation—Statutory Construction.

The supreme court reviewed the court of appeals’ conclusion that the Montezuma County Assessor had statutory authority to retroactively assess property taxes on oil and gas leaseholds operated by Kinder Morgan, after the assessor determined that Kinder Morgan had underreported the wellhead selling price of CO2 gas produced at the leaseholds. The court considered whether this assessment was authorized under the statute permitting retroactive property tax assessments when, pursuant to C.R.S. § 39-5-125(1), “taxable property has been omitted from the assessment roll.” Given Colorado’s self-reporting scheme for property taxation of oil and gas leaseholds and the legislature’s amendments to that scheme—which describe the “underreporting of the selling price or the quantity of oil and gas sold [from a leasehold]” as a form of omitted property, C.R.S. §§ 29-1-301(1) and 39-10-107(1)—the court concluded that the assessor had statutory authority to issue the assessment in this case. The court further concluded that the Board of Assessment Appeals did not err in determining that Kinder Morgan had underreported the wellhead selling price of CO2. The court therefore affirmed the judgment of the court of appeals.

Summary provided courtesy of The Colorado Lawyer.

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