The following terms pertain to this chapter:

(1) "Advanced mineral payments" are payments made to royalty interest owners that represent the royalty interest owner's future share of the receipts from the sale of the natural resource.

(2) "Employer's agent" with regard to state withholding means a third party that bears no insurance risk and is reimbursed on a cost-plus-fee basis for payment of sick pay and similar amounts.

(3) "Individual" means a worker who renders service in the course of an occupation.

(4) "Lookback letter" means the letter sent to employers notifying them of their filing frequency for wage withholding.

(5) "Mineral payments" are payments made to royalty interest owners that represent the royalty interest owner's future share of the receipts from the sale of the natural resource.

(6) "Net royalty amount payable" means the amount of mineral proceeds subject to withholding. This amount is equal to the gross royalty payments less any taxes and other expenses deducted pursuant to the royalty agreement in effect.

(7) "Net taxable earnings" means an employee's gross earnings minus the product of the number of the employee's claimed withholding allowances multiplied by the withholding exemption.

(8) "Overriding royalty interest" means ownership in a percentage of production or production revenues, free of the cost of production, created by the lessee, company and/or working interest owner and paid by the lessee, company and/or working interest owner out of revenue from the well.

(9) "Person" means any natural person, company, corporation, association, partnership, joint venture, cooperative, estate, trust, receiver, or any other party or entity that has a working interest, royalty interest, overriding royalty interest, production payment, production payment including in-kind exchanges, or any other ownership interest entitled to production proceeds from deposits in this state.

(10) "Producer" is the person that extracts natural resources from deposits in the state.

(11) "Remitter" means the individual, entity, or trust obligated under a mineral lease to pay royalties to the royalty owner or his assignee, to deliver minerals to a purchaser to the credit of such royalty owner or his assignee, or to pay a portion of the proceeds of the sale of such minerals to the royalty owner or his assignee.

(12) "Reporting forms" includes, but is not limited to:

(a) Form MW-1, the Montana Withholding Tax Payment Voucher;

(b) Form MW-3, the Montana Annual W-2 1099 Withholding Tax Reconciliation form;

(c) Form W-2, the federal wage and tax statement form;

(d) Form RW-1, the Mineral Royalty Withholding Tax Payment Voucher form;

(e) Form RW-3, the Montana Annual Mineral Royalty Withholding Tax Reconciliation form;

(f) Form W-4, the federal Employee's Withholding Tax Allowance Certificate; and

(g) Form 1099, the federal Information Return.

(13) "Sole proprietor" includes the individual owner of a single-member limited liability company that is disregarded for income tax purposes and may include a husband and wife partnership for the purpose of withholding.

(14) "Take in kind" means an operator or non-operator who elects to receive production in lieu of proceeds from the sale of production.

(15) "Withholding exemption" is the amount used in the computation of net taxable earnings. The withholding exemption for the 2017 annual table and computations is $2,110. For other tables, the withholding exemption is divided by the divisor in ARM 42.17.105 corresponding to the payroll period.