I tried to search for an answer, so I’m sorry if this has been asked before. Live in Montana and paying taxes on the mineral lease one-time payment that we received in 2020. But do I need to pay taxes on it in North Dakota since the minerals being leased are in Burke County? I have a feeling I need to do a filing in North Dakota huh… Any answers are greatly appreciated! My 1099-Misc from Lone Tree has MT listed on it… nothing about ND.
Beth
Hey Beth, No idea if you’ve gotten your reply as yet. A relative novice, myself, this would be my reply! If you live in Montana yet the minerals being worked are in North Dakota, you would have to file an out-of-state Income Tax for ND. I live in Tennessee and have been getting a statement since 2010. Sadly, ND as I’ve discovered yearly does not allow for filing electronically meaning each year I have to “mail in” the forms to the state and await a rebate, if one, by snail mail. If you live in MT yet the minerals are worked “in” MT I would think looking at the following link would assist: https://mtrevenue.gov/taxes/individual-income-tax/individual-filing-status/
In essence, if you live in MT and rec’d royalties you would have to file. The leasing company should have filed and sent you a 1099-Misc. At least this is what Continental has provided me yearly!
Hi, thanks for your reply. Yea… it’s just a mineral lease, all paid up front for the 3 yr lease. No Royalties at all. My 1099-Misc only has the total amount given to me, and then in the state portion only MT on it. I called Burke County Treasurer’s office today but they didn’t have an answer either. Will see if anyone else has any input? Thank you again!
If it is just a lease then I only had to file it on my taxes! Now if there is ever a well, ND will be taking out their tax plus to have to file. Last year my accountant did not file in ND. It appears it would have cost me more than the $50 I would be getting in refund.
If it is below a certain amount, ND does not need a tax return. The ND tax people are actually quite helpful.
I had some issues early on with ND taxes as I was not clear on what was required and there was no withholding at that point. It turned out to be minor stuff - $150 for one year, $30-40 for most years and nothing for some years (most of my income was from elsewhere). I did not amend my resident state taxes, but just paid the ND stuff. It got all cleaned up and no issues since. Ancient history at this point.
I won’t opine as to whether ND tax is due, but will simply note two things: 1. The tax forms are on the ND tax website and are fill-in-the-boxes pdf forms; otherwise, TurboTax has a ND add-on for a modest fee; 2. ND taxes are low, so it is just no big deal to keep on the up and up (usually, you get a credit for the ND taxes paid against your home state taxes).
If your mineral interests are in a trust or a corporation, it becomes more complicated as TurboTax for those does not have an add-on for North Dakota and you will have to use the fill-in-the-box forms.
When and if you have production income, the oil companies will withhold ND taxes above a certain modest level. It is pretty minimal, but I usually get a refund anyway.
So, this is just no big deal. After the first year, it will be just a 15-minute annoyance.
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