Las Vegas Sun

March 18, 2024

Damon Political Report

Democrats seek to repeal mining tax from the constitution

Sun Coverage

As promised, legislative Democrats didn’t let the opportunity pass to attempt to extract more tax revenue from the mining industry.

The Senate Revenue Committee today introduced a measure, Senate Joint Resolution 15, that would begin the process of repealing the constitutional protection the industry enjoys on its net proceeds tax.

Because the measure seeks to amend the constitution, the Legislature would have to pass it twice before it would go to voters for a final ratification.

Currently, the mining industry pays a 5 percent property tax on its mineral resources, but is allowed to deduct the cost of extracting and processing the minerals. The deductions have significantly reduced the industry’s tax bill to the state.

Because the tax is enshrined in the constitution, lawmakers are unable to change the rate and are prohibited from assessing any other tax on minerals.

The measure introduced today completely removes the mining tax from the state constitution. That would allow lawmakers to impose a completely different tax or fiddle with the rate.

Because the entire process would take five years, the change would not help lawmakers as they seek more revenue to offset the budget cuts proposed by Gov. Brian Sandoval.

Assemblywoman Peggy Pierce, D-Las Vegas, has introduced a bill that would reduce the industry’s allowable deductions by 60 percent. That measure, which has gained some traction with legislative leadership, would net the state tax revenue much more quickly than the constitutional amendment.

A second measure introduced by the Revenue Committee today would create a new Mining Oversight and Accountability Commission. The new commission would be responsible for writing the tax regulations, taking that duty away from the Nevada Tax Commission.

Senate Majority Leader Steven Horsford, D-North Las Vegas, has criticized the tax commission for passing regulations that he believes expands the mining industry’s deductions beyond what is allowed in statute.

The new commission would also oversee environmental and safety regulations.

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