I live in Oregon and have to pay taxes for the county where mine is from. The state of Oregon gets their slice and also the fed. Best bet is to go to a good accountant that specializes in royalties. Otherwise, you can get screwed royally if your taxes are not prepared properly. We had to learn the hard way.
Andrew said:
Income from royalties derived from Louisiana sources is taxable to Louisiana. You will need to file an IT-540B with Louisiana. You can find the info on this form here.