89-0820

Property

Signed 6/26/90

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX

:

Petitioner, )

: FINDINGS OF FACT,

v. ) CONCLUSIONS OF LAW,

: AND FINAL DECISION

)

PROPERTY TAX DIVISION OF THE : Appeal No. 89‑0820

STATE TAX COMMISSION OF UTAH )

Respondent. :

_____________________________________

STATEMENT OF CASE

This matter came before the Utah State Tax Commission pursuant to the Petition for Redetermination of the Petitioner. By consent of the parties, no hearing was held. The decision of the Commission is based upon materials provided by the parties.

Based upon the information provided, the Tax Commission hereby makes its:

FINDINGS OF FACT

l. The tax in question is property tax.

2. The period in question is XXXXX.

3. The subject well was drilled and completed in XXXXX.

4. Production from the well declined very rapidly and by XXXXX the well was depleted.

5. The taxable value of the subject well for XXXXX was determined by the formula promulgated by the Utah State Tax Commission in Rule R884-24-10P.

CONCLUSIONS OF LAW

The taxable value of the underground oil rights shall be 400 percent of the proceeds from the sale of oil protection from each such property during the calendar year prior to the date of assessment, less applicable exempt, federal, state, Indian royalties, and windfall profits tax. (Utah State Tax Commission Administrative Rule R884‑24‑10P).

DECISION AND ORDER

In the present case, the Petitioner argues that the application of the formula in determining the taxable value of the subject well does not accurately reflect the oil and gas reserves remaining in the well for the tax year XXXXX.

While the Petitioners' basic premise that the taxable value for XXXXX does not reflect actual value may be correct, it is also misleading. The Petitioner fails to note that such a disparity becomes offset in the subsequent years when there is no production from the well and, thus, there is no taxable value placed on the well.

Based upon the foregoing, the Tax Commission finds that the Property Tax Division properly and accurately applied the formula promulgated by the Commission in Rule R884‑24‑10P. Therefore, the determination of the Property Tax Division is affirmed. It is so ordered.

DATED this 26th day of June, 1990.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

ABSENT

Joe B. Pacheco G. Blaine Davis

Commissioner Commissioner

NOTICE: You have ten (10) days after the date of the final order to file a request for reconsideration or thirty (30) days after the date of final order to file in Supreme Court a petition for judicial review. Utah Code Ann. '' 63‑46b‑13(1), 63‑46b‑14(2)(a).

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