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).
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).
The Montana Annual Mineral Royalty Withholding Tax Reconciliation (Form RW-3) and all Forms 1099-MISC and 1042-S are due on January 31.
You must file the annual reconciliation and Forms 1099-MISC and 1042-S even if you do not need to withhold taxes on mineral royalty payments.
Mineral Royalty Withholding Tax
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
- Pay through our TransAction Portal (TAP),
- Pay using Business Tax Express,
- Make an ACH Credit Payment
- Use the Mineral Royalty Withholding Payment Voucher (Form RW-1)
Mineral Royalty Withholding Payments are due on the last day of the month following the end of the calendar quarter:
- First Quarter
- April 30
- Second Quarter
- July 31
- Third Quarter
- October 31
- Fourth Quarter
- January 31
If you want to file on an accelerated basis instead of quarterly, please contact us. We will still mail your voucher packet each quarter but will include additional vouchers.
Penalties and Interest
Mineral Royalty Withholding is subject to uniform penalties and interest.
- January 31
- Withholding Payments
6% of Net Royalties