BILLINGS — A state judge has ordered Montana authorities to recalculate how much is owed by a Wyoming mining company that challenged its $3.4 million tax bill.   

Monday's ruling from District Judge Jeffrey Sherlock of Helena concerned Cloud Peak Energy's sale of coal to affiliates that it partially owns.    

The state alleges the Gillette, Wyo., company undervalued coal that it sold between 2005 and 2007 — and paid too little in taxes as a result.   

But Sherlock says tax authorities erred in coming up with a value for Cloud Peak's coal based on when it was shipped. He says the value should be based on when the sales contract was signed.   

The practice of selling coal to affiliated companies also is under scrutiny by federal regulators investigating royalties on coal shipped to Asia.

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