Coal Severance Tax (Montana)

From Open Energy Information

Last modified on February 12, 2015.

EZFeed Policy

Place Montana

Applies to States or Provinces Montana
Name Coal Severance Tax (Montana)
Policy Category Other Policy
Policy Type Fees
Affected Technologies Coal with CCS
Active Policy Yes
Implementing Sector State/Province

Program Administrator Montana Department of Revenue
Primary Website

Last Review 2014-09-15

Information Source


The Coal Severance Tax replaces and streamlines previous coal taxes to: (a) allow the severance taxes on coal production to remain a constant percentage of the price of coal; (b) stabilize the flow of tax revenue from coal mines to local governments through the property taxation system; (c) simplify the structure of coal taxation in Montana, reducing tax overlap and improving the predictability of tax projections; (d) recognize the economic, transportation, and environmental advantages of electrical generation by modern electrical generation plants near coal mines; and (e) accomplish the purposes of this subsection by establishing categories of taxation that recognize the unique character of coal, as well as the variations found within the coal industry, and by encouraging the use of coal to produce electricity in modern generating plants near the coal mine.

Persons producing less than 50,000 tons of coal in a year are exempt from the severance tax. Persons producing in excess of 50,000 tons per year are exempt from the severance tax on the first 20,000 tons produced. The first 2 million tons of coal produced as "feed stock" for a coal enhancement facility is exempt.

Funds from the Coal Severance Tax are placed into a tax trust bond fund, which is used as a reserve fund to guarantee repayment of state bonds for renewable resource projects if the normal funding source is unavailable.

Policy Contact

Department Montana Department of Revenue
Address Sam W. Mitchell Bldg.
Address 2 125 N. Roberts, 3rd Floor
Place Helena, Montana

Authorities (Please contact the if there are any file problems.)

Authority 1: 15-35-1 MCA

Authority 2: 17-5-7 MCA

Authority 3: 15-35-103 MCA