187.071 ROYALTY INCOME FROM OIL AND/OR GAS WELLS.

   Income received by a taxpayer from a royalty interest in the production of an oil and/or gas well, whether managed, extracted or operated by the taxpayer individually or through an agent or other representative, shall be included in the computation of net profits from a business activity under Section 187.03 (c), (d) and (e) only if and to the extent such royalty interest constitutes a business activity of the taxpayer.

   Where the gross income received by a taxpayer from royalty interest in the production of an oil and/or gas well in a taxable year exceeds three thousand dollars ($3,000) it shall be prima-facie evidence that the income was derived from a business activity of such taxpayer and the net income from such royalty interest shall be subject to tax.

(Ord. 1981-47. Passed 4-27-81.)