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Is a non-Texas entity that owns a royalty interest in an oil and gas well in Texas subject to the franchise tax?

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Is a non-Texas entity that owns a royalty interest in an oil and gas well in Texas subject to the franchise tax?

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Yes. A royalty interest in an oil and gas well is considered an interest in real property. Therefore a non-Texas entity that owns a royalty interest in an oil and gas well in Texas is considered to own real property in Texas and is subject to the franchise tax unless it is a non-taxable entity.

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