Comptroller of the Treasury v. Shell Oil Co.

WILNER, Judge.

This appeal arises from a disagreement between the Comptroller of the Treasury and Shell Oil Company over the amount of Maryland corporate income taxes owed by Shell for the years 1976, 1977, and 1978. At issue is whether royalties paid by Shell under certain leases for oil and gas producing properties constituted “gross rent,” as defined in one of the Comptroller’s regulations — COMAR 03.04.01.03E(4)(a).

In its tax returns for the years in question, Shell treated the royalty payments as gross rent; the Comptroller disputed that treatment, recalculated Shell’s taxes on the…