Law Could Change For Mining Taxes - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Law Could Change For Mining Taxes

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Last year, Nevada mines produced nearly $9 billion of gold.

One bright spot in a recovering economy.

Tim Crowley is the President of the Nevada Mining Association and says that profit is good for the state.

"Our economic footprint in Nevada is 4.4% of the economy but despite that, we contribute 8% of the general fund moneys that are deposited to the state, each year," Crowley said.

A provision in the Nevada Constitution establishes a separate tax rate for the mining industry and it's been a controversial issue for years.

Some say mining companies aren't paying enough taxes while others say they're already paying some taxes that other businesses don't.

Senate Joint Resolution 15 would repeal that provision, which passed in the last session.

If it passes again, it will be put on the 2014 ballot. Then if voters pass it, the legislature can change the way they tax mining companies.

Bob Fulkerson is the State Director of the Progressive Leadership Alliance of Nevada.

He argues that mining companies get unfair tax breaks, because of a provision written into the state constitution in 1864.

"We think that in times of need, where we're closing schools in Nevada, and skyrocketing gold prices, the industry needs to step up," Fulkerson said.

PLAN says mining companies paid $104 million in taxes last year, or 1%.

Former State Archivist Guy Rocha says that is the lowest rate in the country.

"Let's get a level playing field as we look to broaden our tax base and other ways to do things," Rocha said. "The mining industry needs to be treated like gambling, insurance, banks, those restaurants, that artist, all of them."

"There is no protection on taxes to mining," Crowley said. "What the constitution does is requires us to pay another quarter billion on taxes. So, they're calculation is flawed."

That requirement is the net proceeds of minerals tax, which brought in $245 million to the general fund, in 2011.

When you include other taxes, Nevada Mining says they paid more than $417 million in state taxes.

"SJR 15 would eliminate the Net Proceeds of Minerals Tax and erase it from the books, and in essence, we would no longer pay that quarter of a billion dollars in taxes," Crowley said.

"They can spin those numbers till the cows come home but it does not escape the fact that one percent of their gross, mining tax to the general fund is peanuts."

Supporters of the SJR 15 say a change in tax structure won't hurt the mining industry since gold prices are $1,635 an ounce.

They say that's enough to keep employment high at Nevada mines.

Written by Paul Nelson

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