Possessory Interest Tax (PIT)
This is a tax on the taxable value of a possessory interest granted by the Navajo Nation. A possessory interest is the right to be on Navajo land performing a particular activity. The most common forms of possessory interests are oil and gas leases, coal leases, rights-of-way, and business site leases. All possessory interests fall within one of the five classifications set forth in the statue. The Office of the Navajo Tax Commission uses common appraisal methods to place a market value on the possessory interest. Next, the taxable value is calculated based on the classification system, where each classification's value. Possessory interests with a taxable value of less than $100,000 are not taxed.
The PIT is assessed annually on August 1st, with one-half of the payment due November 1 and the remainder due the following May 1st.