Royalties vs. taxation of profits
Article from: OGEL 3 (2004), in Taxation
Introduction
The concept of royalty payments for mineral rights originated before personal income taxes and corporate income taxes were developed. For example, royalties were applied to crude oil extraction at the beginning of the 20th century. In the context of the chaotic development of the oil industry in Texas and Louisiana, 1901-1930, following the discovery of oil in Spindletop oil field near Beaumont in 1901, it is understandable that private landowners wished to receive compensation in the form of royalties instead of profit taxes. The people who drilled wells in East Texas at the ...