Deed Tax Severed Mineral Rights

Deed Tax is due on the execution of a deed conveying legal ownership of severed mineral rights.

“Severed mineral rights” refers to the situation where one party has legal ownership of any minerals that exist below the surface of a designated piece of land while another party has legal ownership to the rest of the real property.

Several provisions of the Minnesota Statutes have declared that severed mineral rights are treated as separate real property for tax purposes. For example, Minnesota Statutes 272.04 and 272.05 provide that mineral rights can be assessed and taxed separately from the surface land. Under M.S. 273.165, severed mineral rights are subject to Property Tax. Also M.S. 272.03, subd. 1 (a) defines real property to include minerals.

Whenever a deed is executed conveying legal ownership of any minerals existing under land owned by someone else, the grantor is responsible for paying Deed Tax on the consideration received for the sale.