42.25.1111    TREATMENT OF ROYALTIES

(1) All royalties (including those considered to be nontaxable) may be deducted in computing net proceeds as provided under ARM 42.25.1102 and 42.25.1103.

(2) Each royalty interest shall be assessed at its full cash value in the same manner as net proceeds regardless of the net proceeds of the operator or whether the operator deducted the royalty to arrive at the net proceeds.

(3) The department shall transmit royalty lists to the respective local department field office in the county where the mine is located.

(4) Each royalty owner shall be notified of the royalty assessment amount as reported by the mine operator.

(5) Certain royalties are considered nontaxable and shall not be assessed. � With certain exceptions as defined below, all royalties are subject to taxation.

(a) Royalties paid to the United States government, state of Montana, county, city, school district, or other political subdivision of the state are considered nontaxable.

(b) Royalties paid to Indian tribes from production on tribal land are taxable, but royalties paid to the United States government from production on allotted Indian land are nontaxable.

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History: Sec. 15-23-108, MCA; IMP, Sec. 15-23-505 and 15-23-507, MCA; NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1111, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00.