Montana Mineral Royalty Withholding — Guidance

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Mineral Royalty Withholding

Overview

Anyone making mineral royalty payments to a shareholder (remitter) from a property in Montana must withhold tax if the thresholds are met and file a Montana Annual Mineral Royalty Withholding Tax Reconciliation (Form RW-3) . ( 15-30-2536 through 15-30-2547, MCA ).

For more information, please review our Mineral Royalty Withholding Tax Guide (PDF, 321 KB) .

Who Is a Remitter?

A remitter is any individual, entity, or trust that:

Pays royalties to a royalty owner or their assignee

Delivers minerals to a purchaser on behalf of a royalty owner or their assignee

Pays a portion of the proceeds on mineral sales to a royalty owner or their assignee

If you are a remitter, we will notify you if you must withhold taxes on mineral royalty payments.

You can register for a mineral royalty withholding account using our TransAction Portal (TAP) or using the Montana Department of Revenue Business Registration (Form GenReg) .

Annual Reconciliation

The Montana Annual Mineral Royalty Withholding Tax Reconciliation (Form RW-3) and all Forms 1099-MISC and 1042-S are due on January 31 with an automatic extension to February 28.

You must file the annual reconciliation and Forms 1099-MISC and 1042-S even if you do not need to withhold taxes on mineral royalty payments.

Tax Rates

The Mineral Royalty Withholding is 6% of the net royalty paid to the royalty owner.

We will grant you the authority to forego withholding tax on royalty payments:

Less than $166 in the current period

Less than $2000 if paid annually

Reporting and Payment Options

Pay through our TransAction Portal (TAP) ,

Make an ACH Credit Payment

Use the Mineral Royalty Withholding Payment Voucher (Form RW-1)

Due Dates for Payments

Mineral royalty withholding payments are due on the last day of the month following the end of each calendar quarter:

First Quarter: April 30

Second Quarter: July 31

Third Quarter: October 31

Fourth Quarter: January 31

Penalties and Interest Mineral Royalty Withholding is subject to uniform penalties and interest .