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Coal mined in Montana is taxed with the Coal Severance Tax to be reported on the Coal Severance Tax return.

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 Type	Under 7,000 BTU	7,000 BTU or Higher
Surface Mined Coal	10% of value	15% of value
Underground Mined Coal	3% of value	4% 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.

Price FOB Mine - Production Taxes + Royalties = Contract Sales Price

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.

Royalties = ((Federal Tons + State Tons + Tribal Tons) x $0.15) + Other Royalties

Reporting and Payment Options

File and pay through our TransAction Portal (TAP)

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 30

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.

Coal Severance Tax