Las Vegas Sun

March 29, 2024

Mining industry sues to stop effort to raise its taxes

Updated Thursday, Feb. 23, 2012 | 2:41 p.m.

The Nevada Mining Association has filed a lawsuit to halt an initiative petition that seeks to increase the cap on Nevada’s mining tax.

In the lawsuit filed in Carson District Court and first reported by the Nevada News Bureau, the Nevada Mining Association accuses the petition’s creator, Las Vegas businessman Monte Miller, of failing to adequately inform voters of the petition’s ramification. The mining association also argues the petition violates the constitution’s uniform and equal clause requiring all properties be taxed at the same rate.

“Monte Miller’s proposed mining tax initiative goes far beyond what meets the eye, and Nevadans have a right to know the full impact of what they’re being asked to sign,” said the mining association’s president Tim Crowley in a statement. “Proponents of ballot measures have a legal duty to inform voters accurately and honestly regarding the effects of their petitions, and Mr. Miller’s description here is totally inadequate in this regard. The impact this proposed initiative will have on Nevada’s overall tax structure and its citizens is not even addressed by Mr. Miller.”

Miller’s initiative petition seeks to raise the constitutional tax rate cap on the net proceeds of minerals to 9 percent from 5 percent. While the petition would not increase the mining tax, it would give the Legislature the authority to do so.

The mining tax enjoys special protections in the Nevada Constitution, which has hampered some lawmakers who believe the industry is not paying its fair share, especially while it booms as the rest of the economy struggles.

But the mining association’s lawsuit claims the net proceeds tax-rate cap can’t be adjusted without affecting the state’s 5 percent cap on the tax rate applied to all other properties. “Under the Nevada Constitution, the maximum any other property in the state can be taxed is 5 percent of the assessed fair market value of the property,” the lawsuit argues. "The petition, therefore, would authorize the Legislature to discriminate against mineral property with a rate exceeding that constitutionally permissible for all property.”

The lawsuit also argues that the petition should inform voters on why the mining tax rate cap should be increased and should provide more detail on how the Legislature would increase the tax under the new provisions.

To qualify for the ballot, Miller and his group Nevadans United for Fair Mining Taxes would have to gather 72,352 signatures by August. Voters would then have to approve the petition twice before it would become law.

Maggie McLetchie,lawyer for Nevadans United for Fair Mining Taxes, called the lawsuit baseless. She noted the mining industry failed to find an argument that the petition violates the state's single subject rule, indicating the petition is "very simple and straightforward."

"Our description says exactly what this would do: which is to raise the cap from 5 percent to 9 percent. It doesn't mandate the Legislature increase the tax, it just allows it do it," McLetchie said. "This is changing one number."

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