Kentucky royalty owners do not bear severance tax, which is unusual and worth real money. And a married Kentucky seller needs their spouse's signature even on minerals the spouse never owned.
This is the whole guide, on one page, free, with nothing gated. It covers what you own, the Kentucky law that decides what lands in your bank account, whether your minerals can be taken from you, what happens if a well is drilled and you are not leased, what you owe when you sell, and the questions worth asking any buyer including us.
Almost every confusing thing in oil and gas comes from the fact that the mineral estate is not one thing. It is a bundle of five rights that can be split apart and sold separately:
A mineral interest is all five. A non-participating royalty interest is only the fifth, with no say in leasing and no share of bonus. An overriding royalty interest is carved out of a particular lease and dies when that lease dies. A working interest takes revenue net of costs and, unlike all of the above, can lose you money.
Which one you hold changes the value, the tax treatment, and who has to sign what. Start here: NPRIs, overriding royalties, and the glossary.
Ordinary post production costs yes, **severance tax no**. In *Baker v. Magnum Hunter Production, Inc.*, 473 S.W.3d 588 (Ky. 2015), the court put Kentucky in the at the well column and allowed deduction of accumulating, compressing, processing and transporting costs. But in *Appalachian Land Co. v. EQT Production Co.*, 468 S.W.3d 841 (Ky. 2015), decided the same day, the court held that **absent a specific contractual provision apportioning it, a lessee may not deduct severance taxes** before calculating royalty. Check your statement for a severance tax line.
Your first move if the deductions look wrong is a written demand by certified mail, keeping the receipt, because the certification is what starts the clock. Our free letter templates have the wording and the statement decoder explains every line on the stub.
Kentucky has no royalty payment timing statute of the kind most producing states have. Your lease governs.
| Minimum payment rule | Not set by statute. |
| Time limit to sue over an underpayment | Governed by general contract limitations |
A stopped check very often is not a stopped well. The usual causes are a balance under the minimum threshold, a title change putting the interest in suspense, an unprobated death in the chain, an address the payor could not deliver to, or a change of payor after an acquisition. That money does not disappear; it sits in suspense and eventually goes to state unclaimed property. See unclaimed royalties.
No dormant mineral act; a proposal died in 2000. What Kentucky has instead is **KRS 353.460 to 353.476**, a judicial trust for severed interests of unknown or missing owners. A circuit court may appoint a trustee who can **lease** the interest, though not sell the fee, and the unknown owner can eventually be time barred.
Yes, under **KRS 353.630 and 353.640**. The election period is **30 days from entry of the order** and the nonconsent penalty is **200 percent**. Critically, **an owner who does not elect within 30 days is deemed to have leased** to the operator on the statutory terms. Doing nothing in Kentucky does not leave you unleased, it leases you. An unknown or nonlocatable owner is deemed leased exclusive of one eighth of production and gets no election at all.
The reason any of this exists is the rule of capture: a well on the tract next to yours can legally drain oil and gas from under your land, and you cannot sue anyone for it. Pooling is what converts being drained into having a share. The expensive mistake is almost never the pooling itself. It is missing the election deadline, which turns a real choice into a default nobody picked.
Severance tax. 4.5 percent of market value on crude petroleum under KRS 137.120 and 4.5 percent of gross value on natural gas and NGLs under KRS ch. 143A, with credits for production from recovered inactive wells. **And again: the producer bears it, not you.**
When you sell. Flat **3.5 percent** effective January 1, 2026, down from 4.0 percent. Nonresidents are taxed on Kentucky source income with a one day filing threshold, and many local jurisdictions add occupational or net profits taxes. **No withholding at closing.** Kentucky still has a **state inheritance tax**: Class A beneficiaries are exempt, Class B and C are not.
See taxes when you sell mineral rights, and if you inherited the interest, understand the stepped-up basis before you sell anything: your basis is generally the value at the date of death, not what your grandparents paid, which frequently means far less taxable gain than owners expect.
**Kentucky still enforces dower and curtesy** under KRS ch. 392. A married grantor's mineral deed needs the non-owning spouse's signature to release. KRS 392.070 allows recovery from a purchaser, so it reaches buyers.
The single most common thing we see is an interest still sitting in the name of someone who died twenty or forty years ago. It is fixable, it is cheaper to fix than to leave, and we pay for the curative work as part of a purchase. See inherited mineral rights, selling before probate is done, and transferring inherited minerals.
The Division of Oil and Gas publishes no searchable well database of its own; records live at the **Kentucky Geological Survey**, searchable through KY Geode. Be aware KGS hosts per-well production only from **1997 to 2015**, and current production is confidential for a full calendar year. Land records are with the County Clerk in each of **120 counties**, the second highest count in the country.
Our well records by state page links every state's free public search, and our operator directory covers more than 38,000 operators with contact information refreshed weekly.
Producing royalties are priced off cash flow and decline. Non-producing minerals are priced off location and activity. Almost every offer you receive is built the same way: take your last twelve months of royalty income and apply a multiple.
That method has one predictable failure, and it is worth understanding because it is where most owners lose money. It assigns a value of zero to anything that has not happened yet. A permit next door. An undrilled bench under your section. A refrac on an old wellbore. A unit being formed. None of that is in last year's income, so none of it is in the offer.
Ask any buyer, including us, to show you their remaining location count and the reasoning behind it. If they will not break it out, they are pricing your check rather than your minerals. See how mineral rights are valued.
You are welcome to use every one of these on us. That is the point of publishing them.
A check stub, an old deed, a division order, a pooling order, or just the county. We will identify the interest, value it with the arithmetic shown, and tell you honestly if you should keep it. Free, no obligation, and no mailing list.
Get a Free Valuation Ask a LandmanLast reviewed August 2026. Statutes, rates, and case law change, and where Kentucky law is genuinely unsettled we have said so rather than filling the gap. Berlin Royalties is a mineral buyer and a landman shop in Tulsa, not a law firm or a tax advisor, and this guide is general information rather than advice about your interest. For a dispute worth real money, hire a lawyer in Kentucky.