Montana Department of Revenue

Coal Severance Tax

Home / Taxes & Fees / Natural Resource Taxes / Coal Severance Tax

Quick Information

Due Dates

First Quarter
April 30
Second Quarter
July 30
Third Quarter
October 30
Fourth Quarter
January 29

Fees

Percentage of Value based on extraction and heat content

Related Resources

Coal mined in Montana is taxed with the Coal Severance Tax:

  • Businesses producing more than 50,000 tons of coal per year pay the tax on all production over 20,000 tons.
  • Businesses producing less than 50,000 tons per year are exempt from the tax.

Tax Rates

Coal severance tax rates are based on the heat content (BTUs per pound) of the coal and the method of extraction.

Extraction TypeUnder 7,000 BTU7,000 BTU or Higher
Surface Mined Coal10% of value15% of value
Underground Mined Coal3% of value4% of value

Determining Coal Value

The severance tax applies to the contract sales price of the coal.

The contract sales price is the sales price of the coal extracted and prepared for shipment FOB Mine, minus the required production taxes.

\text{Price FOB Mine} - \text{Production Taxes} + \text{Royalties} = \text{Contract Sales Price}

Production Taxes

Production taxes include:

Royalties

The contract sales price includes up to $0.15 per ton royalties paid to federal, state, and tribal governments and all royalties paid to other mineral rights owners.

\text{Royalties} = ((\text{Federal Tons} + \text{State Tons} + \text{Tribal Tons}) \times \$0.15) + \text{Other Royalties}

Reporting and Payment Options

Due Dates

The return is due 30 days after the end of each calendar quarter:

First Quarter
April 30
Second Quarter
July 30
Third Quarter
October 30
Fourth Quarter
January 29

Penalties and Interest

The Coal Severance Tax is subject to uniform penalties and interest.

Revenue Distribution

We collect the coal severance tax and distribute the revenues according to 15-35-108, MCA.

Related Laws