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Court Favors Landowner in Tax Dispute

WBM attorneys are pursuing a possible class action following a decision by the Sixth Circuit Court favoring Appalachian Land Co. in Kentucky in a tax several and royalties dispute.

The Sixth Circuit on October 27 reversed a U.S. District Court for the Eastern District of Kentucky decision that had favored natural gas processor EQT Production in the dispute. EQT had been withholding tax from the amount of royalties it was paying Appalachian Land for it natural gas, thus reducing the proceeds (royalties) to Appalachian.

“Absent a clear legislative directive to the contrary, the privilege to deplete this nonrenewable resource and bring it to market is most logically bestowed upon the producer — not the passive lessor from whose land the resource is being severed,” the court said.

“This decision could affect thousands of landowners,” said John Whitfield, WBM partner, who represented Appalachian. “The court clearly stated that the producer must pay taxes, not the passive landowner.”

If you would like more information on the case, please contact Whitfield at 270-821-0656 or by email at john@wbmllp.com.