Nevada legislature, industry battle over mining taxes Senate Bill 400
“Some say we don’t pay our fair share of taxes — that’s absolutely true. We pay more than our fair share of taxes.” — Tim Crowley Nevada Mining Association President By JOHN RASCHE Mining Quarterly Staff Writer
ELKO — This spring, Nevada legislators and the mining industry battled over how to tax companies digging up metals. Legislators, city councilmen and county commissioners from mining areas threw their support to the industry, but the decision of what will happen to mining taxes was still undecided by mid May. The Assembly’s Committee on Taxation discussed the mining tax bill, Senate Joint Resolution 15, May 2 with broadcasts to Elko and Las Vegas. SJR15 would repeal a provision in the state constitution that caps the mining industry’s net proceeds of minerals at 5 percent. “It will create uncertainty for county revenues ... and uncertainty about taxes to the mining industry moving forward,” Nevada Mining Association President Tim Crowley said before the committee in Carson City. “... Some say we don’t pay our fair share of taxes — that’s absolutely true. We pay more than our fair share of taxes.” Several community members met at Great Basin College to oppose the bill, but Elko City Councilman Rich Perry was the only one to speak before the committee via video conference because of time constraints. Perry read highlights from a letter the city recently sent to the Assembly in opposition to SJR15 and Senate Bill 400. “The notion that natural resource industries are protected from taxation by the State Constitution and are See MINE TAX, 5
AP Photo/Cathleen Allison
President of the Nevada Mining Association Tim Crowley testifies in a hearing May 2 at the Legislative Building in Carson City. Lawmakers are considering a proposal to remove the constitutional tax protections for the mining industry as part of the whole tax debate at the Legislature.
4 MINING QUARTERLY, Elko, Nevada SUMMER 2013
SJR15 opponents fear that if the bill is passed, mining industries could fall victim to other tax-related bills, including Senate Bill 400. SB400, which was introduced in the Senate on March 18, revises provisions governing the taxation of mines and mining claims. The bill would place a property tax on mines, thereby assessing the property for its worth in resources and minerals. “We ...wonder how the mineral value becomes part of the taxable value within the current valuation scheme as the Assessor is required to value land at market value,” the Eureka County Board of Commissioners wrote in a letter to the Senate Committee on Revenue and Economic Development. “When we do sales analyses to determine land value, potential mineral content and even mineral interests are not considered.” Opponents to SB400 also argue that the mining industry already pays its fair share in taxes. According to the Nevada Mining Association, the mining industry paid over $147 million in state and local taxes in 2011. “State revenues have fallen substantially, resulting in a significant shortfall in the 2009-2010 budget that was addressed through deep cuts and significant fee increases,” the NMA website argues. “The mining industry contributed to these solutions through increased filing claim fees of approximately $25 million, and by pre-paying approximately $123 million in anticipated taxes from the four largest mining companies in the state. Continued increases in the price of gold, which represents nearly 88 percent of Nevada’s gross proceeds from mines, also enabled the industry to make significant contributions to the state budget through the Net Proceeds Mines Tax.” More than 50 percent of the NPOM tax revenue goes to the Nevada General Fund and is distributed on a per capita basis throughout the state, according to the website.