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).

Annual Reconciliation

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

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

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.

You must always file a voucher or electronic payment record. If you didn’t pay royalties during the filing period, submit a record reporting “zero” withholding.

Penalties and Interest

Mineral Royalty Withholding is subject to uniform penalties and interest.

Quick Information

Due Date

Reconciliation
January 31
Withholding Payments
Quarterly

Taxes

6% of Net Royalties

Related Forms and Links