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).

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

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

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.