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Tuesday, Jan. 31, 2012 | 5:07 p.m.
CARSON CITY -- Nevada’s constitutional cap on the state mining tax would nearly double if a conservative businessman succeeds in passing a proposed constitutional amendment filed Tuesday.
Monte Miller, a small government advocate, filed the initiative that would allow the Legislature to raise the net proceeds on minerals tax from 5 percent to 9 percent.
“It’s about fairness,” said Miller, who is heading the newly formed Nevadans United for Fair Mining Taxes.
Miller, who owns a Henderson business that incorporates companies in Nevada, complained that while other businesses and individuals have been subjected to discussions about tax increases, mining has been able to point to its tax cap in the constitution.
Miller also said he will submit an initiative to raise the tax on gambling, but would not go into the details at this time.
Labor is in talks with mining and gaming about a proposed tax on businesses’ margins, based on Texas tax. While neither industry has taken a position - the initiative is still being finalized - Miller made clear his frustration that mining’s industry-specific tax could not be increased.
“They’re supporting taxes on other industries and entities, but you can’t raise taxes with a cap,” he said. “The heck with that.”
Miller made clear that his initiative, which would require votes of the people in 2012 and 2014, would then allow the Legislature and governor’s office to adjust the tax rate.
Miller said other businesses saw the state payroll tax, called the modified business tax, increase 67 percent in 2009 and that tax extended in 2011.
“Mining hasn’t been at the table,” Miller said.
Tim Crowley, president of the Nevada Mining Association, said, “I don’t think Monte Miller would know where that table is.”
Mining has supported broad-based taxes, including in 2003 and pre-paid taxes in 2009, Crowley said. In 2010, it agreed to the state raising some mining claim fees, and paid an additional $48 million to the county and state over the biennium with the elimination of some deductions.
Miller was rebuffed by the Keystone Corp, a conservative business group on which he sits, earlier this month over his proposals
Lawmakers are also moving their own constitutional proposal through the legislative process. Senate Joint Resolution 15, passed 2011 and will be up for consideration in 2013. It would take mining’s tax out of the state’s constitution. If it passes in 2013, it would go to a vote of the people in 2014.
5% tax on the Net Proceeds....is high time for the mining industry to pony-up the money it owes Nevada. I mean......NET PROCEEDS...cook the liabilities books a little, tweak an asset or two here or there.....and viola..minimal $$$ to the state coffers. If the mining companies do not like to cost to do business in Nevada, let them abandon their mining claims, as am sure there would be other mining companies breaking down the doors to take them over, and pay a FAIR and REASONABLE tax for the windfall profits they have enjoyed. Once you have your mining operation up and running, it is a matter of O&M costs. The value of gold had nearly tripled over the last couple of years, while labor and materials costs have gone down. Not like our miners here are getting any slice of the additional pie, and the state is sure not reaping any benefits of the increased value of gold.
Mining is indeed enjoying a boom cycle at this time but it is very easy for everyone to forget that not that long ago most companies were struggling just to stay solvent and many failed due to depressed metal prices. Mining has always been and always will be a cyclical industry. What may seem to some to be obscene profits will be used to weather the storm when the next bust occurrs. Defining and developing an ore body is an extremely cost intensive endevour and even with the best geological information they often do not prove cost effective. The best way to ensure that companies are no longer willing to take the risk of developing a property in your state is to increase taxes. When companies are deciding where to develope new properties the overall cost of doing business at that location is a significant factor. Four percent may not sound like much but it may very well be the difference between money being spent in your state to develope a new mine or the money going to another state or country.