Montana Administrative Code

42.25.1501 DEFINITIONS The following definitions apply to this chapter: "Mineral" as used for resource indemnity trust tax purposes, means any precious stones or gems, gold, silver, copper, coal, lead, scoria, travertine, petroleum, natural gas, oil, uranium, or other nonrenewabl…

42.25.1502 APPLICABILITY Minerals which are stockpiled or otherwise placed in storage in the same form as when extracted or produced are not subject to the tax until refined, treated, or sold. Authorizing statute(s): 15-1-201, MCA Implementing statute(s): 15-38-105, MCA History: …

42.25.1503 COMPUTATION OF TAX The resource indemnity trust tax is computed on the gross value of the mineral at the time of extraction from either the surface or subsurface of the earth. Producers may not reduce gross value for any costs or expenses of bringing minerals to mine m…

42.25.1504 RESPONSIBILITY FOR FILING FORMS AND PAYING TAX Preparation and filing of the resource indemnity trust tax statement of gross yield and payment of the tax due is the direct and sole responsibility of every individual, partnership, firm, association, joint stock company,…

42.25.1505 SUPPLEMENTAL INFORMATION Attachments may be made to the resource indemnity trust tax statement of gross yield if space is not adequate on the form to provide complete information. Companies using data processing equipment may provide computer printouts to supply the pr…

42.25.1506 MINIMUM TAX AND ANNUAL EXEMPTION The minimum annual tax of $25 is due only once each year from each individual, partnership, firm, association, joint-stock company, syndicate, or corporation who engages in or carries on the business of mining, extracting, or producing …

42.25.1507 COMPUTATION OF GROSS VALUE For all minerals except oil and gas, gross value of product for purposes of the resource indemnity trust tax will be determined at the time of extraction from the ground. The time of extraction is after loading the raw mineral product and bef…

42.25.1601 ELECTRICAL ENERGY PRODUCER'S LICENSE TAX: LINE LOSS Deductions from total kilowatt hours generated will be allowed only for actual and necessary plant use. No deduction is allowed for any line losses. Authorizing statute(s): 15-1-201, MCA Implementing statute(s): 15-51…

42.25.1701 DEFINITIONS The following definitions apply to this subchapter: "Arm's-length transaction" means a contract, negotiation, or agreement between or among parties where the parties have independent interests and are not related. "Contract revenue" means the total receipts…

42.25.1702 BASE CONSUMPTION LEVEL DETERMINATION - JOINTLY OWNED FACILITIES (REPEALED) Authorizing statute(s): 15-35-122, MCA Implementing statute(s): 15-35-102, MCA History: NEW, 1986 MAR p. 125, Eff. 1/31/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00; REP, 2009 MAR p. 2495, Eff. 12/2…

42.25.1703 BASE CONSUMPTION LEVEL - SALE OF INTEREST (REPEALED) Authorizing statute(s): 15-35-122, MCA Implementing statute(s): 15-35-102, MCA History: NEW, 1986 MAR p. 125, Eff. 1/31/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00; REP, 2009 MAR p. 2495, Eff. 12/25/09.

42.25.1704 ELIGIBILITY FOR TAX CREDIT (REPEALED) Authorizing statute(s): 15-35-122, MCA Implementing statute(s): 15-35-202, MCA History: NEW, 1986 MAR p. 125, Eff. 1/31/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00; REP, 2009 MAR p. 2495, Eff. 12/25/09.

42.25.1705 APPLICABLE TAX RATES (Is Hereby Repealed.) Authorizing statute(s): Sec. 15-35-122, MCA Implementing statute(s): Sec. 15-35-103, MCA History: NEW, 1988 MAR p. 1990, Eff. 9/9/88; REP, 2000 MAR p. 2988, Eff. 10/27/00.

42.25.1706 IMPUTED VALUATION FOR COAL (REPEALED) Authorizing statute(s): 15-35-122, MCA Implementing statute(s): 15-35-107, MCA History: NEW, 1988 MAR p. 2406, Eff. 11/11/88; AMD, 2000 MAR p. 2988, Eff. 10/27/00; AMD, 2009 MAR p. 2495, Eff. 12/25/09; REP, 2017 MAR p. 2204, Eff. 1…

42.25.1707 DETERMINATION OF CONTRACT SALE PRICE The contract sales price of the coal is calculated immediately after the point the coal is prepared for shipment to the first arm's-length purchaser of the coal. "Prepared for shipment" and "purchaser" are defined in 15-35-102, MCA.…

42.25.1708 IMPUTED VALUATION When imputing value pursuant to 15-35-107, MCA, the department may use valuation methods which approximate the value of coal, including but not limited to comparable actual arm's-length sales, comparable actual arm's-length sales adjusted for FOB mine…

42.25.1709 RIGHT TO REVIEW RECORDS The department may examine records of coal companies and their related parties, including contracts for the sale of coal, to determine the price of coal. Records obtained shall be considered confidential. Authorizing statute(s): 15-35-122, MCA I…

42.25.1801 DEFINITIONS In addition to the definitions found in 15-36-303, MCA, the following definitions apply to terms used in this subchapter: "Arm's-length contract" means a contract or an agreement to sell that has been arrived at between independent, nonaffiliated parties wi…

42.25.1802 DECLARATORY RULING PROCEDURE When an operator is uncertain how these regulations will apply to a particular circumstance, that person may petition the department for a declaratory ruling as provided in ARM 42.2.102 through 42.2.106, effective May 26, 2000. Copies of th…

42.25.1803 TREATMENT OF NONWORKING INTERESTS (ROYALTIES) Nonworking interest owners' share of production paid to the federal, state, tribal, county or municipal governments pursuant to the lease are deductible from gross value in determining oil or natural gas production tax. Non…

42.25.1804 HORIZONTALLY COMPLETED OR RECOMPLETED WELLS For horizontally completed or horizontally recompleted wells the operator must provide to the department of revenue a copy of the horizontal certification from the board of oil and gas conservation. If the operator does not p…

42.25.1805 QUALIFICATION OF NEW OR EXPANDED RECOVERY PROJECTS For new or expanded enhanced recovery projects the operator must provide to the department of revenue the board's approval of the project and the designated area of the project. If a project has not been approved by th…

42.25.1806 ALLOCATION OF INCREMENTAL PRODUCTION If the designated area of a new or expanded enhanced recovery project has wells reported for tax purposes prior to the inception of the new or expanded enhanced recovery project, both as pre-1999 wells and as post-1999 wells, the op…

42.25.1807 AVERAGE DAILY WELL PRODUCTION CALCULATION In determining whether a lease or unit has an average daily production of less than 60,000 cubic feet of natural gas per well, only those wells that produced natural gas during the prior calendar year shall be used in the calcu…

42.25.1808 DUALLY QUALIFIED STRIPPER WELLS AND ENHANCED RECOVERY PROJECTS For the purpose of this rule a lease or unit will be considered to be dually qualified if the lease or unit qualifies as an oil stripper and the wells are within an approved enhanced recovery project. If th…

42.25.1809 TAX RATES Table I reflects the tax rates effective October 1, 2006 through September 30, 2016, as set forth in 15-36-304, MCA, and by the Montana Board of Oil and Gas Conservation by rule. Table II reflects the tax rates effective on October 1, 2016, as set forth in 15…

42.25.1810 DISTRIBUTION (REPEALED) Authorizing statute(s): 15-36-322, MCA Implementing statute(s): 15-36-324, MCA History: NEW, 1996 MAR p. 2001, Eff. 7/19/96; AMD, 1996 MAR p. 2435, Eff. 9/20/96; AMD, 2000 MAR p. 1347, Eff. 5/26/00; AMD, 2001 MAR p. 2048, Eff. 10/12/01; REP, 200…

42.25.1811 PARTIAL OR SUPPLEMENTAL PAYMENTS OF TAX (REPEALED) Authorizing statute(s): 15-36-322, MCA Implementing statute(s): 15-36-324, MCA History: NEW, 1996 MAR p. 2001, Eff. 7/19/96; REP, 2005 MAR p. 2470, Eff. 12/9/05.

42.25.1812 BLACKFEET RESERVATION PRODUCTION (REPEALED) Authorizing statute(s): 15-36-322, MCA Implementing statute(s): 15-36-311, 18-11-103, 18-11-309, MCA History: NEW, 1996 MAR p. 2001, Eff. 7/19/96; REP, 2005 MAR p. 2470, Eff. 12/9/05.

42.25.1813 APPLICABILITY All oil and gas production taxes collected after the date the tax was due will be distributed in accordance with the statutes and administrative rules governing the distribution of the tax in effect on the date the tax revenue is received. For all oil and…

42.25.1814 INCENTIVE PERIOD Incentive periods for new wells, vertical or horizontal, begin following the last day of the calendar month immediately preceding the month in which production begins. This incentive period only begins once, and is dependent upon the first production f…

42.25.1815 DISTRIBUTION BY POPULATION The department shall distribute funds from the oil, gas, and coal natural resource account to qualifying counties with more than one incorporated city or town using census information provided by the department of commerce. The population inf…

42.25.1816 DETERMINING QUALIFYING PRODUCTION Qualifying production time period begins immediately after the last day of the month preceding the month when production first started. The qualifying production time period continues for 12 or 18 contiguous months, 12 for vertical pro…

42.25.1817 GROSS VALUE OF NATURAL GAS If natural gas is sold pursuant to an arm's-length contract at the wellhead, the contract price multiplied by the volume of natural gas will be accepted as the total gross value. If natural gas is sold in the absence of a contract the total g…

42.25.1818 DELIVERY PRICE ADJUSTMENT (DPA) COSTS DPA costs are reasonable and necessary costs incurred by the operator to bring the gas to the point of delivery. DPA costs must be documented, itemized, and increase the value of the gas. Allowable delivery price adjustment costs i…

42.25.1819 POLICY ON DELIVERY PRICE ADJUSTMENTS Deductions are allowable only to the extent that they represent directly related costs of the operator's central facilities and were actually incurred and paid. The Montana Oil and Gas Production Tax is not an income tax. Therefore,…

42.25.1820 NECESSITY OF PROOF Any delivery price adjustment or reduction in value will be disallowed if the operator does not keep adequate records or other proof to show the amount and purpose for the expense. To satisfy the adequate records requirement, there must be records ma…

42.25.201 REPORTING REQUIREMENTS Each person mining or extracting gold, silver, copper, lead, or other metals from any mine or mining property located within this state shall assay each shipment of ore, concentrate or slimes prior to its leaving the state. These assays shall be p…

42.25.501 DEFINITIONS The following definitions apply to this subchapter: "Arm's-length transaction" means a contract, negotiation, or agreement between or among parties where the parties have independent interests and are not related. "Contract revenue" means the total receipts …

42.25.502 FILING REQUIREMENTS Each year on or before March 31, all persons engaged in mining coal in this state are required to compute and file the current Department of Revenue form reflecting the preceding calendar year production. All information requested on this form must b…

42.25.503 FAILURE TO FILE Any person producing coal in this state must, on or before March 31 each year, file with the department of revenue a coal gross proceeds tax return for coal produced in the preceding calendar year. Any person refusing or neglecting to file after receipt …

42.25.511 DETERMINATION OF CONTRACT SALES PRICE The contract sales price of the coal is calculated immediately after the point the coal is prepared for shipment to the first arm's-length purchaser of the coal. "Prepared for shipment" and "purchaser" are defined in 15-35-102, MCA.…

42.25.512 IMPUTED VALUATION When imputing value pursuant to 15-35-107, MCA, the department may use valuation methods which approximate the value of the coal, including but not limited to comparable actual arm's-length sales, comparable actual arm's-length sales adjusted to FOB mi…

42.25.513 TAXABLE VALUATION On or before July 1 each year the department will submit taxable valuations for each operating coal mine to the department's agent in the county where the coal was produced. Authorizing statute(s): 15-23-108, MCA Implementing statute(s): 15-23-702, 15-…

42.25.514 RIGHT TO AUDIT The department may examine records of coal companies, including contracts for the sale of coal, to determine whether the price of coal as reported is the result of an agreement not at arm's length. The department will, if necessary, examine operator's rec…

42.25.515 IMPUTED VALUATION FOR COAL (REPEALED) Authorizing statute(s): 15-35-122, MCA Implementing statute(s): 15-35-107, MCA History: NEW, 1983 MAR p. 1834, Eff. 12/16/83; AMD and TRANS, from ARM 42.22.2115, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 1988 MAR p. 2406, Eff. 11/11/88;…

42.26.1001 DEFINITIONS The following definitions are applicable to the terms contained in this sub-chapter, unless the context clearly requires otherwise. "Outer-jurisdictional property" means certain types of tangible personal property, such as orbiting satellites, undersea tran…

42.26.1002 GENERAL RULE Except as specifically modified by this rule, when a person in the business of publishing, selling, licensing, or distributing newspapers, magazines, periodicals, trade journals, or other printed material has income from sources both within and outside of …

42.26.1003 APPORTIONMENT OF APPORTIONABLE INCOME For purposes of this subchapter, the property factor will be determined as outlined in (2) and (3). All real and tangible personal property, including outer-jurisdictional property, whether owned or rented, which is used in the bus…

42.26.101 ALTERNATIVE TAX Effective with taxable periods beginning on and after January 1, 1971, a corporation deriving income from sources both within and without Montana and whose only activities in Montana consist of making sales and do not include owning or renting real or ta…