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.

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.

Production Taxes

Production taxes include:

• State severance tax
• Resource Indemnity Trust and Ground Water Assessment Tax
• Local gross proceeds tax
• Federal reclamation taxes
• Federal Black Lung tax

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.

Reporting and Payment Options

• File and pay through our TransAction Portal (TAP)
• Use the Coal Severance Tax (Form CST)

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

• 15-35-102, MCA
• 15-35-108, MCA
• ARM 42.25.1701