15-35-203. Calculation and application of credit. (1) The amount of new coal production incentive tax credit that a coal mine operator may claim against the tax imposed in 15-35-103 is calculated by:
     (a) determining the incremental production for each of his qualified purchasers that was produced during a calendar year;
     (b) distributing the incremental production among the quarters in the calendar year in the same proportion as the total volume of coal sold each quarter to each respective purchaser and summing the amounts for all purchasers to determine the coal mine operator's incremental production for each quarter;
     (c) determining the arithmetic average severance tax per ton calculated prior to application of the credit on coal sold to each qualified purchaser each quarter during the calendar year;
     (d) multiplying the incremental production for a quarter for a purchaser by the average severance tax per ton for that purchaser and multiplying the total by the appropriate percentage as provided in 15-35-202 for each quarter; and
     (e) totaling the amount so calculated for all qualified purchasers for all four quarters of the calendar year.
     (2) When filing the quarterly statement required in 15-35-104, a coal mine operator may claim against the coal severance tax calculated for that quarter an amount equal to 25% of the new coal production incentive tax credit allowed on incremental production that occurred during the previous calendar year.
     (3) If in any calendar year a purchaser exceeds his base consumption level and he has purchased from more than one Montana coal mine operator during the year, the credit on the incremental production must be divided among the operators on a pro rata basis. To determine each coal mine operator's pro rata share of the tax credit, each operator shall divide his incremental production by the sum of all coal mine operators' incremental production for that purchaser and multiply the quotient by the purchases in excess of the base consumption level for that purchaser.
     (4) Neither a coal mine operator nor a purchaser is entitled to a direct payment for the credit allowed in 15-35-202. A credit terminates if not taken during the year following the year in which the incremental production occurred.
     (5) Each coal mine operator must reduce the delivered price of coal sold to each qualified purchaser by an amount equal to the credit received on incremental production sold to that purchaser.

     History: En. Sec. 4, Ch. 636, L. 1985; amd. Sec. 6, Ch. 608, L. 1987.