Mineral Right Royalties

[C_Barnes08]

I live in Montana and inherited mineral rights in North Dakota.  Each year I receive a 1099-MISC with royalties listed in box 4 and state tax witholding in box 16 (paid to ND).  The Royalty income is less than $500 annually and the state taxes paid are less than $10.  The last couple of years, I have filed a ND non-resident tax form which results in a refund of $5 each year.  This seems silly to have to file a non-resident form in North Dakota only to receive a $5 refund on the overpayment of the state taxes.  I understand filing if taxes were due, but that is not the case each year with the small refund.  Do I need to bite the bullet and continue to file each year?  Any help is appreciated!  Thank you!  

[KrisD15 · Accepted solution]

The state requirement is that you do file. 

According to the State of North Dakota:

A nonresident of North Dakota (which means you do not live here for more than 7 months) is required to file a North Dakota individual income tax return if: 1) you are required to file a federal return, AND 2) receive income from a source in North Dakota.

These sources could include income from:

• Property – rents, royalties, or gains from sales/exchanges
• Gambling activities
• Subchapter S Corporation – income other than wages
• Sales of goods, personal, or professional services into North Dakota

ND link