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Old 02-01-2012, 04:37 PM
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Natural Gas Money Oil Lease Tax headache

We received a gas well payment. It was one payment. The payment we received actually sat for 2 years before we finally made a request from the company to send it to us. We got a 1099-MISC in the mail. The property that money came from was are home in Texas.

For my job I work for a contract company based out of California. They sent me to Arkansas to do work. I lived out of a hotel very briefly while there. of course my residents and family is in Texas. The California company pays me not the Arkansas company. But the California company paid into Arkansas state tax. My question is I understand my wages are to be declared to Arkansas. I'm filing as a non resident of arkansas. My question is does Arkansas state tax require me to report my gas well money made in Texas???? Especially considering that the time of the drilling and when i made the money and received payment I was not in Arkansas not even in the hotel in arkansas.

If they do, I don't understand how Arkansas can tax gas money made on a house in Texas. When Arkansas has no affiliation on the property what so ever.



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Old 02-02-2012, 11:02 AM
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“My question is does Arkansas state tax require me to report my gas well money made in Texas????”---->No. As you said, you have your residents and family is in TX, then I assume that you are a full year resident of TX. Then as there is NO State Tax Reciprocal Agreement between TX and AR, you, as a non-resident of AR, need to pay tax to AR only on your income that you earned in AR. Your gas well payment from TX is subject to only TX tax.Your payment is NOT even subject to tax to CA.However, you can claim your AR tax that you pay to AR(if you paid to AR) on your TX return .So, you need to contact the CA co. and need to file AR tax for refund.
“Especially considering that the time of the drilling and when i made the money and received payment I was not in Arkansas not even in the hotel in arkansas. “----->As described above, your pauyment is NOT subject to AR, but is subject to TX tax, your home state.
“If they do, I don't understand how Arkansas can tax gas money made on a house in Texas. When Arkansas has no affiliation on the property what so ever.”----->Anyway, you need to file your AR tax return for refund. You can contact the CA co. and explain the situation and ask them if they can refund the withholding to AR state. It is possible for them to make this adjustment on their tax forms and then give you a corrected Form 1099. However, they are not required to do so and may not want to. If they refuse to do that then you will have to file AR nonresident return to get


Last edited by Wnhough : 02-02-2012 at 11:18 AM. Reason: to change a word


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