Information About the Proposed Amendment to the Gross Production Tax

The MHA Nation Tribal Business Council requested that information be provided to the public via the MHA Nation website to address concerns about the taxation of royalty interests in response to the MHA Nation Tax Department’s proposed Tax Code changes to section 804 of the gross production tax. The MHA Nation Tribal Business Council has never taxed Indian landowner royalty interests and the proposed code changes do not change the Council’s position. 

The proposed code changes to section 804 relate only to the increase in the tax rate and nothing else. The rest of the language in section 804, including the language regarding the taxation of royalty interests, has been in the Code since it was first approved in 1988. In 1990, the Tribal Business Council adopted Resolution No. 90-103-TL, which made it clear that landowner royalty interests are exempt from taxation. 

Resolution No. 90-103-TL, states that “all landowner royalty interests in oil and gas produced within the exterior boundaries of the Fort Berthold Reservation shall be exempt by Tribal Law from imposition of the oil and gas gross production tax of the Three Affiliated Tribes.” Resolution No. 90-103-TL supersedes the original language in section 804 that referenced royalty interests. 

In order to make the Gross Production Tax Ordinance consistent with Resolution No. 90-103-TL, an additional amendment will be proposed to section 804 to remove any language suggesting that landowner royalty interests are not exempt from taxation. 

Fawn Fettig