reglab/statecodes huggingface dataset:
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.15 - Resource Indemnity Trust Tax › Rule 42.25.1501 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
The following definitions apply to this chapter:
(1) "Mineral" as used for resource indemnity
				trust tax purposes, means any precious stones or gems, gold, silver, copper,
				coal, lead, scoria, travertine, petroleum, natural gas, oil, uranium, or other
				nonrenewable merchantable products extracted from the surface or subsurface of
				the state of Montana, including sand and gravel.
15-1-201, MCA; IMP,
					 15-38-103,
					 15-38-105,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.15 - Resource Indemnity Trust Tax › Rule 42.25.1502 - APPLICABILITY

Current through Register Vol. 13, July 5, 2024
(1) Minerals which are stockpiled or
				otherwise placed in storage in the same form as when extracted or produced are
				not subject to the tax until refined, treated, or sold.
15-1-201, MCA; IMP,
					 15-38-105,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.15 - Resource Indemnity Trust Tax › Rule 42.25.1503 - COMPUTATION OF TAX

Current through Register Vol. 13, July 5, 2024
(1) The resource
				indemnity trust tax is computed on the gross value of the mineral at the time
				of extraction from either the surface or subsurface of the earth.
(2) Producers may not reduce gross value for
				any costs or expenses of bringing minerals to mine mouth.
15-1-201, MCA; IMP,
					 15-38-105,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.15 - Resource Indemnity Trust Tax › Rule 42.25.1504 - RESPONSIBILITY FOR FILING FORMS AND PAYING TAX

Current through Register Vol. 13, July 5, 2024
(1) Preparation and filing of the resource
				indemnity trust tax statement of gross yield and payment of the tax due is the
				direct and sole responsibility of every individual, partnership, firm,
				association, joint stock company, syndicate, or corporation who engages in or
				carries on the business of mining, extracting, or producing a mineral, as
				defined in Title 15, chapter 38, MCA.
(2) This responsibility may not be delegated
				or transferred to the owner of the property from which minerals are extracted
				or produced, if different from the producer, or to the purchaser of the
				minerals.
(3) A producer who has
				filed a metal mines license tax return pursuant to Title 15, chapter 37, part
				1, MCA, does not also need to file a resource indemnity trust return. Not
				filing a resource indemnity trust return does not relieve the producer from the
				obligation to pay the tax. A producer of gold, silver, copper, lead, or any
				other metal or metals or precious or semiprecious gems or stones who does not
				file a metal mines license return must file a resource indemnity trust tax
				return.
15-1-201, MCA; IMP,
					 15-38-104,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.15 - Resource Indemnity Trust Tax › Rule 42.25.1505 - SUPPLEMENTAL INFORMATION

Current through Register Vol. 13, July 5, 2024
(1) Attachments may
				be made to the resource indemnity trust tax statement of gross yield if space
				is not adequate on the form to provide complete information. Companies using
				data processing equipment may provide computer printouts to supply the
				production information if columns and/or totals are properly
				identified.
15-1-201, MCA; IMP,
					 15-38-105,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.15 - Resource Indemnity Trust Tax › Rule 42.25.1506 - MINIMUM TAX AND ANNUAL EXEMPTION

Current through Register Vol. 13, July 5, 2024
(1) The
				minimum annual tax of $25 is due only once each year from each individual,
				partnership, firm, association, joint-stock company, syndicate, or corporation
				who engages in or carries on the business of mining, extracting, or producing a
				mineral. Likewise the $5,000 reduction of gross value of product may be claimed
				only once each year by a producer.
15-1-201, MCA; IMP,
					 15-38-104,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.15 - Resource Indemnity Trust Tax › Rule 42.25.1507 - COMPUTATION OF GROSS VALUE

Current through Register Vol. 13, July 5, 2024
(1) For all
				minerals except oil and gas, gross value of product for purposes of the
				resource indemnity trust tax will be determined at the time of extraction from
				the ground. The time of extraction is after loading the raw mineral product and
				before any hauling or transportation occurs.
(2) Gross value of product at the time of
				extraction will be determined using one of the following methods for each
				product produced as noted:
(a) For coal, the
				gross value of the product is the "contract sales price" for the coal severance
				as stated in
				15-35-102, MCA, times the tons
				produced; except the tonnage exemption defined in
				15-35-103, MCA, cannot be claimed
				in computing the resource indemnity trust tax.
(i) If the department imputes a value for
				coal pursuant to
				15-35-107, MCA, the same imputed
				value will be used in computing the resource indemnity trust tax.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.16 - Electrical Energy Production Tax › Rule 42.25.1601 - ELECTRICAL ENERGY PRODUCER'S LICENSE TAX: LINE LOSS

Current through Register Vol. 13, July 5, 2024
(1) Deductions from total kilowatt hours
				generated will be allowed only for actual and necessary plant use. No deduction
				is allowed for any line losses.
Sec.
					 15-1-201, MCA; IMP, Sec.
					 15-51-101,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1701 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
The following definitions apply to this subchapter:
(1) " Arm's-length transaction" means a
				contract, negotiation, or agreement between or among parties where the parties
				have independent interests and are not related.
(2) "Contract revenue" means the total
				receipts or accruals from all sales of coal during the reporting
				period.
(3) "FOB mine price" means
				contract revenue less reasonable actual costs incurred to transport the taxable
				coal from the mine to a sales point remote from the mine after the coal is
				prepared for shipment.
(4) "Impute"
				means to assign a market value to coal by inference under circumstances set
				forth in 15-35-107, MCA.
(5) "Market value" means the value at which
				coal would change hands between a willing buyer and a willing seller under
				market and economic conditions at the time of sale, neither being under any
				compulsion to buy or to sell and both having reasonable knowledge of relevant
				facts. Agreements that are not arm's-length transactions will not be considered
				market value of for purposes of filing the Montana coal production
				taxes.
(6) "Related parties" means
				any relationship that has the ability to influence whether each party has
				independent interests and could influence a party's independence in negotiating
				a transaction; or
(a) when any of the
				following circumstances exist:
(i)
				Affiliation. The parties are members, affiliates, subsidiaries, or any other
				affiliations under the same ownership of a parent entity.
(ii) Common control. The parties are,
				directly or indirectly, under common or joint control.
(iii) Family member. A party is a close
				family member of a person who is part of key management personnel or who
				controls another party to a transaction. A close family member is an
				individual's domestic partner and children, children of the domestic partner,
				and dependents of the individual or the individual's domestic
				partner.
(iv) Individual control. A
				party is controlled or significantly influenced by a member of key management
				personnel or by a person who controls another party to the
				transaction.
(v) Joint venture. The
				parties are members of a joint venture.
(vi) Key management. The parties share key
				management personnel.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1702 - BASE CONSUMPTION LEVEL DETERMINATION - JOINTLY OWNED FACILITIES (REPEALED)

Current through Register Vol. 13, July 5, 2024
15-35-122, MCA; IMP,
					 15-35-102,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1703 - BASE CONSUMPTION LEVEL - SALE OF INTEREST (REPEALED)

Current through Register Vol. 13, July 5, 2024
15-35-122, MCA; IMP,
					 15-35-102,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1704 - ELIGIBILITY FOR TAX CREDIT (REPEALED)

Current through Register Vol. 13, July 5, 2024
15-35-122, MCA; IMP,
					 15-35-202,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1705 - APPLICABLE TAX RATES (REPEALED)

Current through Register Vol. 13, July 5, 2024
Sec.
					 15-35-122, MCA; IMP, Sec.
					 15-35-103,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1706 - IMPUTED VALUATION FOR COAL (Repealed)

Current through Register Vol. 13, July 5, 2024
AUTH:
					 15-35-122, MCA; IMP:
					 15-35-107,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1707 - DETERMINATION OF CONTRACT SALE PRICE

Current through Register Vol. 13, July 5, 2024
(1) The
				contract sales price of the coal is calculated immediately after the point the
				coal is prepared for shipment to the first arm's-length purchaser of the coal.
				"Prepared for shipment" and "purchaser" are defined in
				15-35-102, MCA. Contract sales
				price will be the calculated FOB mine price . Transportations costs that reduce
				the contract sales price of the coal shall not reduce the contract sales price
				below zero. The contract sales price will be further adjusted by deducting from
				either the FOB mine price or a value imputed by the department:
(a) the allowance for federal, state, and
				Indian royalties; and
(b) the
				amounts charged to the purchaser to pay taxes on production.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1708 - IMPUTED VALUATION

Current through Register Vol. 13, July 5, 2024
(1) When imputing
				value pursuant to
				15-35-107, MCA, the department may
				use valuation methods which approximate the value of coal at its intended
				market use, including but not limited to comparable sales, comparable sales
				adjusted for FOB mine price, or published coal sales indexes. Contract term,
				tonnage, quality, Btu rating, and any of the appropriate comparability criteria
				will be considered.
(2) If using
				comparable sales in computing value, the department will maintain the
				confidentiality of all comparable contract data and will use contract data
				provided by the producer in question whenever possible.
AUTH:
					 15-35-122, MCA; IMP:
					 15-35-107,
					 15-38-109,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.17 - Coal Severance Tax › Rule 42.25.1709 - RIGHT TO REVIEW RECORDS

Current through Register Vol. 13, July 5, 2024
(1) The
				department may examine records of coal companies and their related parties,
				including contracts for the sale of coal, to determine the price of coal.
				Records obtained shall be considered confidential.
AUTH:
					 15-35-122, MCA ; IMP:
					 15-35-103,
					 15-38-109,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1801 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
In addition to the definitions found in
				  15-36-303,
				  MCA, the following definitions apply to terms used in this subchapter:
(1) "Arm's-length contract" means a contract
				or an agreement to sell that has been arrived at between independent,
				nonaffiliated parties with adverse economic interests. Contracts or agreements
				for the purposes of these rules will be defined to be non-arm's-length if the
				parties to the contract or agreements have business relationships other than
				the agreement between the buyer and seller which have influenced the sales
				price.
(2) "Central facilities" are
				installations which are used to cool, heat, separate, dehydrate, compress,
				sweeten, or gather/transport natural gas at a point remote from the well or
				wells.
(3) "Delivery point" means
				a point away from the well or lease where the natural gas is sold.
(4) "Delivery price adjustments" includes all
				expenses directly incurred and paid for in the operation and maintenance of
				"central facilities". Delivery price adjustments are merely a reduction in
				price and are not meant to be a deductible expense beyond the well or wells.
				Delivery price adjustments only occur when the department deems it necessary to
				establish the correct natural gas gross value.
(5) "Lease" means that particularly described
				tract of land contained in a contract in writing whereby a person having a
				legal interest in the land so described conveys a portion of his interest to
				another, in consideration of a certain rental or other recompense or
				consideration. A lease may contain one or more wells. One operator shall be
				named as the lease operator and shall be responsible for filing the oil and
				natural gas production tax return.
(6) "MCF" means 1,000 cubic feet of natural
				gas measured at a pressure of 14.73 pounds per square inch and a temperature of
				60 degrees Fahrenheit.
(7)
				"Natural gas" means a mixture of hydrocarbon gases and other products which at
				normal atmospheric conditions of temperature and pressure are in a gaseous
				state. This includes coalbed methane gas.
(8) "Natural gas liquids" means all ethane,
				butane, propane, hexane, heptane, and heavier gases which are removed for
				natural gas by processing.
(9)
				"Producing well" means a well that produced natural gas, petroleum, or other
				crude or mineral oil in the year prior to the current calendar year.
(a) A well that is used for injection
				purposes only is not a producing well.
(b) A well that produces only water is not a
				producing well.
(c) A well that was
				capable of producing oil or gas but in fact did not produce oil or gas in the
				year prior to the current calendar year is not a producing well.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1802 - DECLARATORY RULING PROCEDURE

Current through Register Vol. 13, July 5, 2024
(1) When an
				operator is uncertain how these regulations will apply to a particular
				circumstance, that person may petition the department for a declaratory ruling
				as provided in ARM
				42.2.102 through
				42.2.106, effective May 26, 2000.
				Copies of these rules may be obtained by contacting the Department of Revenue,
				P.O. Box 5805, Helena, Montana 59604-5805.
(a) In addition to the contents of the
				petition outlined in ARM
				42.2.103, a petition must
				delineate the well or wells for which the petition is submitted.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1803 - TREATMENT OF NONWORKING INTERESTS (ROYALTIES)

Current through Register Vol. 13, July 5, 2024
(1) Nonworking interest owners' share of
				production paid to the federal, state, tribal, county or municipal governments
				pursuant to the lease are deductible from gross value in determining oil or
				natural gas production tax.
(2)
				Nonworking interest owners' oil and natural gas production is subject to
				different tax rates than the working interest, as shown in ARM
				42.25.1809.
15-36-322, MCA; IMP,
					 15-36-304,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1805 - QUALIFICATION OF NEW OR EXPANDED RECOVERY PROJECTS

Current through Register Vol. 13, July 5, 2024
(1) For new or expanded enhanced recovery
				projects the operator must provide to the department of revenue the board's
				approval of the project and the designated area of the project. If a project
				has not been approved by the board, the operator will not be allowed to report
				and pay taxes herein at the reduced rates for incremental production.
(2) A tax return shall be filed for the wells
				in each designated area. If the designated area for a new or expanded enhanced
				recovery project does not include all the wells reported as a lease or unit for
				tax purposes prior to the inception of the new or expanded enhanced recovery
				project, the wells not included in the designated area approved by the board
				will continue to be reported as a lease or unit for tax purposes and none of
				the production from wells outside the designated area can be reported as
				incremental.
(3) No production will
				qualify as incremental prior to January 1, 1994. For new or expanded projects
				commenced after January 1, 1994, approval should be obtained from the board for
				the project prior to the due date of any production tax returns. If, however,
				such approval is not received until after the returns are filed for any quarter
				the operator may file amended returns after the board has approved the project
				and established a production decline rate for the project.
15-36-322, MCA; IMP,
					 15-36-304,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1806 - ALLOCATION OF INCREMENTAL PRODUCTION

Current through Register Vol. 13, July 5, 2024
(1) If
				the designated area of a new or expanded enhanced recovery project has wells
				reported for tax purposes prior to the inception of the new or expanded
				enhanced recovery project, both as pre-1999 wells and as post-1999 wells, the
				operator must report and pay any tax due at the appropriate applicable rates on
				the non-incremental and incremental for pre-1999 and post-1999 wells.
(2) The amount of tax to be paid at pre-1999
				and post-1999 tax rates will be based upon a production ratio determined each
				calendar year.
(a) The pre-1999 ratio will be
				computed by dividing incremental and non-incremental production for the
				previous calendar year from wells classified as pre-1999 wells by the total
				production for the previous calendar year from the designated area of the new
				or expanded recovery project.
(b)
				The post-1999 ratio will be computed by dividing incremental and
				non-incremental production for the previous calendar year from wells classified
				as post-1999 wells by the total production for the previous calendar year from
				the designated area of the new or expanded recovery project.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1807 - AVERAGE DAILY WELL PRODUCTION CALCULATION

Current through Register Vol. 13, July 5, 2024
(1)
				In determining whether a lease or unit has an average daily production of less
				than 60,000 cubic feet of natural gas per well, only those wells that produced
				natural gas during the prior calendar year shall be used in the calculation.
				For natural gas that is processed to remove natural gas liquids, the volume
				(i.e., cubic feet) used to calculate the average daily production herein will
				be the volume prior to any removal of the natural gas liquids.
(2) In determining whether a lease or unit
				has an average daily production of less than 15 barrels of crude oil per well
				for stripper qualification, or three barrels of crude oil or less per well for
				the stripper well exemption or stripper well bonus, only those wells that
				produced crude oil during the prior calendar year shall be used in the
				calculation.
(3) The operator must
				provide a stripper calculation for the previous calendar year to the department
				to qualify each oil stripper or natural gas stripper lease or unit each year
				when filing the return for the quarter ending in March to qualify the lease or
				unit as stripper for the current year.
(4) If a well or group of wells has qualified
				as an enhanced recovery project or an expanded enhanced recovery project, all
				production from the well or wells, including any incremental production, must
				be included as production for the purpose of determining if the well or wells
				qualify as stripper.
15-36-322, MCA; IMP,
					 15-36-303,
					 15-36-304,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1810 - DISTRIBUTION (REPEALED)

Current through Register Vol. 13, July 5, 2024
15-36-322, MCA; IMP,
					 15-36-324,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1811 - PARTIAL OR SUPPLEMENTAL PAYMENTS OF TAX (REPEALED)

Current through Register Vol. 13, July 5, 2024
15-36-322, MCA; IMP,
					 15-36-324,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1812 - BLACKFEET RESERVATION PRODUCTION (REPEALED)

Current through Register Vol. 13, July 5, 2024
15-36-322, MCA; IMP,
					 15-36-311,
					 18-11-103, 18-11-309,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1813 - APPLICABILITY

Current through Register Vol. 13, July 5, 2024
(1) All oil and gas production taxes
				collected after the date the tax was due will be distributed in accordance with
				the statutes and administrative rules governing the distribution of the tax in
				effect on the date the tax revenue is received.
(2) For all oil and gas production taxes
				refunded, the amount of the refund allocated to each governmental entity will
				be determined in accordance with the statutes and administrative rules
				governing the distribution of any tax revenue in effect on the date the refund
				is made to the taxpayer.
(3) In
				situations where all of the leases associated with taxes due or refunds as
				referred to in (1) or (2) are no longer operational, the department will use
				the most recent quarter in which at least one lease had production taxes paid
				to distribute the tax or make the refund.
15-36-322, MCA; IMP,
					 15-36-331,
					 15-36-332,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1814 - INCENTIVE PERIOD

Current through Register Vol. 13, July 5, 2024
(1) Incentive
				periods for new wells, vertical or horizontal, begin following the last day of
				the calendar month immediately preceding the month in which production begins.
				This incentive period only begins once, and is dependent upon the first
				production from the well, regardless of whether the oil and gas begin
				production on different dates. Therefore, if a well began producing oil on
				March 1, 2000, and gas began flowing from the same well on August 1, 2000, the
				incentive period begins on March 1, 2000, only.
(2) The incentive periods are applicable for
				qualifying production that occurred during the first 12 months of production of
				oil or natural gas from a well drilled after December 31, 1998, or the first 18
				months of production of oil or natural gas from a horizontally completed well
				drilled after December 31, 1998. It may also mean a well that has not produced
				oil or natural gas during the five years immediately preceding the first month
				of qualifying production. Qualifying production does not include oil production
				from a horizontally recompleted well.
15-36-322, MCA; IMP,
					 15-36-304,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1815 - DISTRIBUTION BY POPULATION

Current through Register Vol. 13, July 5, 2024
(1) The
				department shall distribute funds from the oil, gas, and coal natural resource
				account to qualifying counties with more than one incorporated city or town
				using census information provided by the department of commerce.
(2) The population information will be
				updated with the third quarter distribution, which is distributed in January,
				and continue to be used until the next yearly update.
(3) A qualifying county that has an
				incorporated city or town that is not included in the census must inform the
				department of revenue of that fact, and provide proof of incorporation along
				with the population information for that city or town.
15-36-322, MCA; IMP,
					 15-1-501,
					 15-36-331,
					 15-36-332,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1816 - DETERMINING QUALIFYING PRODUCTION

Current through Register Vol. 13, July 5, 2024
(1)
				Qualifying production time period begins immediately after the last day of the
				month preceding the month when production first started. The qualifying
				production time period continues for 12 or 18 contiguous months, 12 for
				vertical production or 18 for horizontally completed wells.
(a) Example - 8211; A vertical oil or natural
				gas well first produces May 2010. The well will have a reduced tax rate as
				illustrated in
				15-36-304, MCA for the months May
				1, 2010, to April 30, 2011.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1817 - GROSS VALUE OF NATURAL GAS

Current through Register Vol. 13, July 5, 2024
(1) If natural gas
				is sold pursuant to an arm's-length contract at the wellhead, the contract
				price multiplied by the volume of natural gas will be accepted as the total
				gross value.
(2) If natural gas is
				sold in the absence of a contract the total gross value of the natural gas may
				be determined by reviewing comparable arm's-length contracts. The department
				will identify comparable arm's-length contracts utilizing factors including but
				not limited to; similar time, proximity to the location, similar duration,
				similar gas quality, and similar quantity of gas sold. Upon conducting a
				comparable arm's-length study, the department will attempt to identify
				comparable arms-length's contracts within the same field of the leases in
				question prior to using comparable arm's-length contracts from other
				fields.
(3) If natural gas is sold
				through a non-arm's-length contract at the well or wells and sold with an
				arm's-length contract further downstream of the well or wells, the total gross
				value of the natural gas may be determined at the delivery point with delivery
				price adjustments.
15-36-322, MCA; IMP,
					 15-36-305,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1818 - DELIVERY PRICE ADJUSTMENT (DPA) COSTS

Current through Register Vol. 13, July 5, 2024
(1) DPA
				costs are reasonable and necessary costs incurred by the operator to bring the
				gas to the point of delivery. DPA costs must be documented, itemized, and
				increase the value of the gas.
(2)
				Allowable delivery price adjustment costs include but are not limited to:
(a) Costs of direct labor associated with the
				central facilities. Direct labor is not meant to include personnel in corporate
				or headquarter offices who are not directly involved in the actual on-site
				central facility operations;
(b)
				Costs of materials, supplies, maintenance, repairs, and utilities directly
				associated with the central facility;
(c) Property taxes paid on the central
				facility;
(d) Liability and
				casualty insurance directly paid on the central facilities;
(e) Depreciation of the central facility is
				allowed as a reduction in gross value or a delivery price adjustment. The
				department will allow the depreciation of the initial capital investment of the
				central facilities, determined on a straight-line basis for a period of ten
				consecutive years beginning the year in which the facility first began to
				operate. The department will also allow additional capital investments made to
				the central facilities after the initial capital investment determined on a
				straight-line basis for a period of ten consecutive years beginning the year in
				which the additional capital investment was acquired;
(f) A return on investment percentage will be
				allowed to the operator of the central facility provided a balance of the
				initial capital investment is available to be depreciated as calculated in
				accordance with (2)(e). The annual rate of return will consist of the
				undepreciated balance of the capital investment multiplied by Moody's Baa
				corporate bond rate. For example assume the following: both Company Y and
				Company X operate gas wells in Montana, both companies do not have arm's-length
				wellhead contracts, but rather delivered gas contracts well downstream of the
				wells, Company Y made an initial capital investment of a central facility asset
				(a gas processing plant) for $1,000,000 and the initial investment has not been
				fully depreciated ($800,000), Company Y sold the asset to Company X for
				$200,000 (Moody's Baa corporate rate is 3 percent), and Company X will be
				allowed a return on investment reduction of their gas value of 3 percent of the
				acquisition cost or 3 percent * $200,000 or $6,000.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1819 - POLICY ON DELIVERY PRICE ADJUSTMENTS

Current through Register Vol. 13, July 5, 2024
(1)
				Deductions are allowable only to the extent that they represent directly
				related costs of the operator's central facilities and were actually incurred
				and paid.
(2) The Montana Oil and
				Gas Production Tax is not an income tax. Therefore, the delivery price
				adjustment rules do not allow the broad spectrum of deductions allowed under an
				income tax.
15-36-322, MCA; IMP,
					 15-36-305,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.25 - NATURAL RESOURCES TAXES › Subchapter 42.25.18 - Oil and Gas › Rule 42.25.1820 - NECESSITY OF PROOF

Current through Register Vol. 13, July 5, 2024
(1) Any delivery
				price adjustment or reduction in value will be disallowed if the operator does
				not keep adequate records or other proof to show the amount and purpose for the
				expense. To satisfy the adequate records requirement, there must be records
				maintained and supported by receipts, vouchers, or other documentary
				evidence.
15-36-322, MCA; IMP,
					 15-36-305,
					 MCA;
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.1 - General Provisions › Rule 42.26.101 - ALTERNATIVE TAX

Current through Register Vol. 13, July 5, 2024
(1) Effective with
				taxable periods beginning on and after January 1, 1971, a corporation deriving
				income from sources both within and without Montana and whose only activities
				in Montana consist of making sales and do not include owning or renting real or
				tangible personal property and whose dollar volume of gross sales made in
				Montana during the taxable period do not exceed $100,000, may elect to pay a
				tax of 1/2 percent on the gross receipts from sales made in Montana during the
				taxable period. Such tax is in lieu of the tax based upon net income.
(2) The election to pay the alternative tax
				is made by filing a return on Form CIT, reporting the dollar amount of Montana
				gross sales, and paying a tax determined on the basis of 1/2 percent of the
				amount of such sales. The $50 minimum tax does not apply to the alternative
				tax. The gross receipts from sales made in Montana must be determined according
				to the provisions of ARM
				42.26.255
				and
				42.26.257.
				A statement must be attached to the return to the effect that the corporation's
				only activities in Montana consist of making sales and do not include owning or
				renting real property or tangible personal property.
AUTH:
					 15-31-501,
					 MCA; IMP:
					 15-31-101,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.201 - INTENT

Current through Register Vol. 13, July 5, 2024
(1) The regulations in this subchapter of ARM
				Title 42, chapter 26 are applicable to Article IV of the Multistate Tax
				Compact, 15-1-601, MCA, and to the Uniform
				Division of Income for Tax Purposes Act,
				15-31-302 through
				15-31-312, MCA, and are modeled
				after regulations adopted by the Multistate Tax Commission. Statutory
				references in the regulations are to
				15-31-302 through
				15-31-312, MCA, but also apply to
				the corresponding subsections of Article IV of the Multistate Tax Compact,
				15-1-601, MCA.
(2) The regulations in this subchapter are
				intended to set forth methods concerning the application of the apportionment
				and allocation provisions of Title 15, chapter 31, part 3, MCA, and Article IV
				of 15-1-601, MCA. The provisions set
				forth in this subchapter are applicable to any taxpayer having apportionable
				income, regardless of whether or not it has nonapportionable income, and the
				allocation rules are applicable to any taxpayer having nonapportionable income,
				regardless of whether or not it has apportionable income.
(3) The only exceptions to the allocation and
				apportionment rules contained in this subchapter are set forth in ARM
				42.26.261 through
				42.26.264 pursuant to the
				authority of
				15-31-312, MCA. Special rules
				pertaining to certain industries are referenced in other subchapters of ARM
				Title 42, chapter 26.
(4) The
				regulations in this subchapter are not intended to modify existing rules
				concerning jurisdictional standards.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311,
					 15-31-312,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.202 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
The following definitions apply to terms used in this
				  subchapter:
(1) "Allocation" means the
				assignment of nonapportionable income to a particular state.
(2) "Annual rent" means the actual sum of
				money or other consideration payable, directly or indirectly, by the taxpayer
				or for its benefit for the use of the property.
(a) Annual rent includes:
(i) any amount payable for the use of real or
				tangible personal property, or any part thereof, whether designated as a fixed
				sum of money or as a percentage of sales, profits, or otherwise;
(ii) any amount payable as additional rent or
				in lieu of rents, such as interest, taxes, insurance, repairs, or any other
				items which are required to be paid by the terms of the lease or other
				arrangement, not including amounts paid as service charges, such as utilities,
				janitor services, etc. If a payment includes rent and other charges
				unsegregated, the amount of rent shall be determined by consideration of the
				relative values of the rent and the other items.
(iii) any amount payable for a delay rental
				as defined by U.S. Treasury regulations Section 1.612-3 (1980), which defines
				delay rental as follows: A delay rental is an amount paid for the privilege of
				deferring development of the property and which could have been avoided by
				abandonment of the lease, or by commencement of development operations, or by
				obtaining production.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.203 - CONSISTENCY AND UNIFORMITY IN REPORTING

Current through Register Vol. 13, July 5, 2024
(1) In
				filing returns with this state, if the taxpayer departs from or modifies the
				manner in which income has been classified as apportionable or nonapportionable
				income in returns for prior years, the taxpayer shall disclose in the return
				for the current year the nature and extent of the modification.
(2) If the returns or reports filed by a
				taxpayer for all states to which the taxpayer reports under Article IV of the
				Compact or the Uniform Division of Income for Tax Purposes Act are not uniform
				in the classification of income as apportionable or nonapportionable income,
				the taxpayer shall disclose in its return to this state the nature and extent
				of the variance.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601, Title 15, chapter 31,
					 part 3, MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.204 - COMBINED REPORTS

Current through Register Vol. 13, July 5, 2024
(1) If a particular
				trade or business is carried on by a taxpayer and one or more unitary
				affiliated corporations owned greater than 50 percent, the taxpayer is required
				to file a "combined report" whereby the entire apportionable income of such
				trade or business is apportioned in accordance with
				15-31-305 through
				15-31-311, MCA.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311,
					 15-31-312,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.205 - TWO OR MORE BUSINESSES OF A SINGLE TAXPAYER

Current through Register Vol. 13, July 5, 2024
(1) A taxpayer may have more than one "trade
				or business." In such cases, it is necessary to determine the apportionable
				income attributable to each separate trade or business. The income of each
				business is then apportioned by an apportionment formula which takes into
				consideration the in-state and out-of-state factors which relate to the trade
				or business income being apportioned.
(2) The determination of whether the
				activities of the taxpayer constitute a single trade or business will depend on
				the facts in each case. In general, the activities of the taxpayer will be
				considered a single business if there is evidence to indicate that the segments
				under consideration are integrated with, dependent upon, or contribute to each
				other and the operations of the taxpayer as a whole. The following factors are
				considered to be good indicia of a single trade or business, and the presence
				of any of these factors creates a strong presumption that the activities of the
				taxpayer constitute a single trade or business:
(a) A taxpayer is generally engaged in a
				single trade or business when all of its activities are in the same general
				line. For example, a taxpayer which operates a chain of retail grocery stores
				will almost always be engaged in a single trade or business.
(b) A taxpayer is almost always engaged in a
				single trade or business when its various divisions or segments are engaged in
				different steps in a large, vertically structured enterprise. For example, a
				taxpayer which explores for and mines copper ores; concentrates, smelts, and
				refines the copper ores; and fabricates the refined copper into consumer
				products is engaged in a single trade or business regardless of the fact that
				the various steps in the process are operated substantially independently of
				each other with only general supervision from the taxpayer's executive offices.
(c) A taxpayer which might
				otherwise be considered as engaged in more than one trade or business is
				properly considered as engaged in one trade or business when there is a strong
				central management, coupled with the existence of centralized departments for
				such functions as financing, advertising, research, or purchasing. Thus, some
				conglomerates may properly be considered as engaged in only one trade or
				business when the central executive officers are normally involved in the
				operations of various divisions and there are centralized offices which perform
				for the divisions the normal matters which a truly independent business would
				perform for itself, such as accounting, personnel, insurance, legal,
				purchasing, advertising, or financing.
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.207 - DETERMINATION OF APPORTIONABLE AND NONAPPORTIONABLE INCOME

Current through Register Vol. 13, July 5, 2024
(1) Rental income from real and tangible
				property is characterized as apportionable income if the property with respect
				to which the rental income was received is, or was, used in the taxpayer's
				trade or business and therefore is includable in the property factor under ARM
				42.26.231 and
				42.26.237. Property that has been
				converted to nonapportionable use has lost its character as a business asset
				and is not subject to the rule of the preceding sentence.
(2) Gain or loss from the sale, exchange, or
				other dispositions of real property or of tangible or intangible personal
				property constitutes apportionable income if the property while owned by the
				taxpayer was used in, or was otherwise included in the property factor of, the
				taxpayer's trade or business. However, if such property was utilized for the
				production of nonapportionable income or otherwise was removed from the
				property factor before its sale, exchange, or other disposition, the gain or
				loss will constitute nonapportionable income. See ARM
				42.26.232.
(3) Interest income is characterized as
				apportionable income where the intangible with respect to which the interest
				was received arises out of or was created in the regular course of the
				taxpayer's trade or business operations or where the acquiring and holding the
				intangible is an integral, functional, or operative component of the taxpayer's
				trade or business operations, or otherwise materially contributes to the
				production of apportionable income of the trade or business
				operations.
(4) Dividends
				constitute apportionable income where the stock with respect to which the
				dividends are received arises out of or was acquired in the regular course of
				the taxpayer's trade or business operations or where the acquiring and holding
				the stock is an integral, functional, or operative component of the taxpayer's
				trade or business operations, or otherwise materially contributes to the
				production of apportionable income of the trade or business
				operations.
(5) Patent and
				copyright royalties are characterized as apportionable income where the patent
				or copyright with respect to which the royalties were received arises out of or
				was created in the regular course of the taxpayer's trade or business
				operations or where the acquiring and holding the patent or copyright is an
				integral, functional, or operative component of the taxpayer's trade or
				business operations, or otherwise materially contributes to the production of
				apportionable income of the trade or business operations.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-302,
					 MCA
Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.26 - CORPORATE MULTISTATE ACTIVITIES › Subchapter 42.26.2 - Income Allocation and Apportionment › Rule 42.26.208 - ALLOCATION OF INCOME AND DEDUCTIONS

Current through Register Vol. 13, July 5, 2024
(1) In
				most cases an allowable deduction of a taxpayer will be applicable only to the
				apportionable income arising from a particular trade or business or to a
				particular item of nonapportionable income. In some cases an allowable
				deduction may be applicable to the apportionable incomes of more than one trade
				or business and/or to several items of nonapportionable income. In such cases,
				the deduction shall be prorated among such trades or business and such items of
				nonapportionable income in a manner which fairly distributes the deduction
				among the classes of income to which it is applicable.
(2) In filing returns with this state, if the
				taxpayer departs from or modifies the manner of prorating any such deduction
				used in returns for prior years, the taxpayer shall disclose in the return for
				the current year the nature and extent of the modification.
(3) If the returns or reports filed by a
				taxpayer with all states to which the taxpayer reports under Article IV of the
				Multistate Tax Compact or the Uniform Division of Income for Tax Purposes Act
				are not uniform in the application or proration of any deduction, the taxpayer
				shall disclose in its return to this state the nature and extent of the
				variance.
(4) If two or more
				entities, whether or not organized or doing business in this state, are owned
				or controlled directly or indirectly by the same interest, the taxpayer may
				petition for or the department may require adjustments that distribute,
				apportion, or allocate gross income or deductions between or among such
				entities to fairly represent the income of any such entities.
AUTH:
					 15-1-201,
					 15-31-313,
					 15-31-501, MCA; IMP:
					 15-1-601,
					 15-31-301,
					 15-31-302,
					 15-31-303,
					 15-31-304,
					 15-31-305,
					 15-31-306,
					 15-31-307,
					 15-31-308,
					 15-31-309,
					 15-31-310,
					 15-31-311,
					 15-31-312,
					 15-31-321,
					 15-31-322,
					 15-31-323,
					 15-31-324,
					 15-31-325,
					 15-31-326,
					 MCA