Royalty Interest: Royalties Paid to Nonresident Interest Owners

Royalties paid to all nonresident interest owners are subject to Oklahoma Withholding Tax. This includes corporations, partnerships, trusts, estates, etc.  The withholding rate is five percent (5%) of the gross royalty. The monies withheld are required to be remitted to the Oklahoma Tax Commission on a quarterly basis using Form WTR10002.  Taxpayers may also choose to report and pay electronically by utilizing QuickTax, our electronic business tax filing system. The obligation to deduct and withhold from payments does not apply to those payments which are made to:

• Current or permanent residents of Oklahoma;
• The United States, this State or any State or Federal Agency or Political subdivision;
• Any charitable institution; or
• Any Federally recognized Indian Tribe.