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August 1, 2014

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Mining industry pays its share of taxes

In a recent

Las Vegas Sun column, J. Patrick Coolican used a recent decline in gold prices as an excuse to dismiss tax contributions by the mining industry.

The facts prove otherwise as mining’s tax contributions have increased significantly in recent years. From 2009 to 2010, taxes paid by the industry increased 55 percent from $203 million to $314 million. Our 2011 tax numbers have yet to be aggregated but are expected to increase by the same rate — if not more. And 2012 tax contributions will continue to increase because of high mineral values and the adjustment made to the net proceeds of minerals tax during the 2011 legislative session. This adjustment creates an additional $24 million in tax revenues paid by the mining industry each year.

Mr. Coolican is also dismissive of the mining industry’s overall approach to tax policy. Once again, the facts prove otherwise. Ten years ago, my predecessor at the Nevada Mining Association, along with the Las Vegas Sun’s publisher, participated with several members of Gov. Kenny Guinn’s Task Force on Tax Policy. Following the advice of a PricewaterhouseCoopers study from the 1980s, this group advised that a wide-ranging tax policy involving all business sectors should be enacted if Nevada policymakers were to determine increased revenues were necessary. Even in 2002, this group knew that relying on one or two industries was unwise.

The 2002 Tax Task Force recognized that all business sectors experience highs and lows and taxing these sectors individually would not provide a sound foundation to support Nevada’s schools and social services. As we slowly emerge from the recession, it’s hard to believe that anyone would argue for a greater and more disproportionate reliance on the largest contributors to Nevada’s economy. Those sectors include, according to the Commerce Department, accommodations and hospitality (gaming) at 15 percent of Nevada’s economy, real estate at 14 percent, banking and insurance at 12 percent, retail at 7 percent and construction at 6 percent.

And where’s mining on this list? Ninth — representing 5 percent of the state’s gross domestic product.

Yet, gaming and mining still remain targets. The current high prices for gold have benefited that segment of the mining industry, as Mr. Coolican points out. However, there are dozens of minerals producers throughout the state putting tens of thousands of Nevadans to work in sectors such as geothermal heat, lithium, copper, diatomite, barite, silver and many others. Not all aspects of the mining industry are booming, and an industry-specific tax on mining affects all of these companies – not just gold.

Despite the relative size of mining’s share of the economy and the industry’s volatility, Mr. Coolican still ignores the advice of PricewaterhouseCoopers study and the Tax Task Force and suggests that Nevada rely more heavily on commodities to fund essential state services such as education and Medicaid.

Beyond the tax revenue, the benefits Nevadans enjoy due to the tax and employment contributions provided by the mining industry can’t be underestimated during times of economic hardship. Unemployment in mining counties is around 7 percent – well below the state average of 12.7 percent – and the mines are continuing to hire.

Our industry’s position on taxes has been consistent since 2002: If Nevada policymakers determine revenue increases are necessary, the mining industry will participate along with the rest of Nevada’s business community, including the newspaper business, in the creation of a reliable tax structure. However, should policymakers instead decide to place our state’s financial security on the backs of a select few industries, those in mining won’t be the only people crying foul should gold prices fall.

Tim Crowley is the president of the Nevada Mining Association.

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  1. Wow. That's some great spin. With the price of gold still more than $1600 an ounce, and with the major foreign gold miners in Nevada pulling out about $14 billion last year, something isn't adding up. Sure, we've got small miners and exploration for the digital economy here. But when we discuss gold mining there's nothing fair about it. Go look at the ravaged landscape left behind that will never recover. And what about our natural resources -- gone. When you take billions, destroy the land and pay a few million, it ain't fair. And why is it, anyway, that mining has to be the one to "agree" to pay more. Who's running the show Mr. Crowley? Oh, I forgot, corporations are people.

  2. I may have missed it, but I don't see the industry's taxes paid compared to its income in Nevada....hmm, maybe that big number would mess up the whining. Extractive industries should leave something behind besides holes in the ground. Montana, for example, has a trust fund that its coal industry must contribute to, with constitutional provisions that keep the Legislature from meddling it in without super majority votes. Nevada is far, far behind that sort of policy. Apparently, we're supposed to appreciate the crumbs and shut up.

  3. Mining paid miniscule taxes on a HUGE profit at a time when gold had gone up from $300 an ounce to $1600 plus?

    Sad and disingenuous to suggest they are under taxed.

  4. There is absolutely no justification for mining to have special protection in our state constitution. And there is no reason not to tax the gold being taken out of the ground at an appropriate rate. Even Alaska has special tax rates on oil pumped from the ground.

  5. Everyone KNOWS mining DOESN'T pay it's fair share. Even mining knows it's practically stealing minerals from Nevada. In an attempt to cover this up it purchased approximately a dozen bill boards in Southern Nevada thinking some positive spin PR would get those filthy middle class Nevadans off its hind. It didn't work the way they wanted it to. It brought more attention to their record of PAYING PRACTICALLY NOTHING for what they've taken.

    Now they think that after getting the LVSUN to publish some garbage spin, that their TOP LOBBYIST Tim Crowley wrote, that Nevadans will just look the other way?

    Mining,
    You had your free ride. The ride is OVER.

    PS. We the people, reserve the right to charge whatever we damn well feel like for OUR minerals.

  6. This is the same industry that argues that toxic mercury and arsenic is really, truly, good for young people, so stop pestering them about their emissions!

  7. Tim...

    You funny!!!

  8. Lmao, simple minded people for the most part have no clue what Obama is doing and why prices on gold and oil is high and will continue skyrocketing to all time highs.

    Oil and gold prices are on the rise is only due to the weak American dollar and Obama's spending on his sick liberal agenda. When Obama is booted and the devaluation of American currency will reverse course; our oil and gold prices will lower. Taxing at today's prices will only put those companies out of business when Obama is gone.

    You need to take your head out that deep dark hole and face reality the Obama agenda isn't the cure, it's the problem. The world markets don't use American currency, gold and oil is traded on American currency, investors abroad lose money when they trade using their currency against our currency and with our national debt he's incurred. Stop the spending on the liberal agenda, prices will plunge. Until then, no amount of tax on anyone is going to help or fix stupid.

  9. Tim, why does mining carry two sets of books? One for the stockholders and one for the state. when your industry pays tax on what they claim as profits to the investors then you _might_ have an argument --- until then you're just spinning poo to the masses.

    "You need to take your head out that deep dark hole and face reality the Obama agenda isn't the cure, it's the problem."

    lmao -- yes, a growing economy is a horrid thing. lets go back to the good old days when the economy was in free fall.

    and you have the temerity to talk bout not being able to fix stupid? here -- let me try to top that. the definition of insanity is doing the same thing over and over again and expecting a different result.

    your hate has made you blind, its2hot. but we, the normal thinking people, are used to hearing the loons chime in with their "ideas".

  10. Mining does pay taxes. Eureka County SD has declined dsa K-12 funding when they are flush from mining. However, with all the deductions to net proceeds of minerals, the mining companies are writing off their revenue and only paying tax on net profit. We NEED FUNDING OF DEPT OF TAXATION and other state agencies so they can function. The Nevada Tax Commission has used NAC's to exempt endless amounts and industries (special interests) from sales and use tax, net proceeds of minerals..... No oversight of commission for years and years. It might tax legislation but how about the Governor sign an EXECUTIVE ORDER ELIMINATING NAC EXEMPTIONS and use NRS statutory authority only. Any and all "new" exemptions and deductions must be renegotiated. While we're at it, let's get authority to VOID EMPLOYEE AND UNION CONTRACTS when the money is not available. Most contracts encourage arbitrators to favor over-compensation when revenues exceed projections--turnabout is fair play? Where are the negative COLA's as our cost of living decreases, as our revenues decline?

  11. "here -- let me try to top that. the definition of insanity is doing the same thing over and over again and expecting a different result."

    Lmao, look around and who's beating to the same old drum, insanity is correct. Insanity at its best, the human cesspool population will grow leaps and bounds as it's been doing for past 25 years if people continue to choose to live by their liberal agenda. Insanity as it's best.

    I have no hate whatsoever; I simply call it like I see it. I have to no need to be politically correct and dance with liberals. I see it simple, if it's working, continue and make it better. If it's not working, stop it and start over. It's not working, the liberal agenda and their sick immoral agenda and excuses are the very reason America has become desecrated into the human cesspool freeloaders.

    To tax more isn't going to cure the problem, no amount of money can fix stupid, it just delays the inevitable, liberal agenda has to go away.

  12. "I have no hate whatsoever; I simply call it like I see it."

    lol --- keep telling yourself that pal. and keep telling us to ignore recent history and that you've got all the answers. we'll believe you --- I mean since you "call it like (you) see it".

    but while you swagger to your place at the head of the line remind us all again how many times Reagan raised taxes. How much a war predicated on a lie cost us. How many jobs per lost per month at the end of Bush's term. How high the stock market is now. How austerity is working for Walker in WI.

    and you think you know what you're talking about? and that you've got no hate in your heart? get serious.

  13. I do not think you can tax Gold or Oil or some other expensive commodity producer just because it is expensive, heck look at those earth minerals, you want to hit it. The miners must pay stumpage or royalty to the landowner and it is probably based on prices and percentages. If NV owns the land then yes, now you have place to go to get some of the big money being paid for gold, but if not, taxing a business just because it sells an expensive product is kind of short sighted, hey, what about those diamond dealers?
    A little herd mentality goes along ways..

  14. I'm sitting in a Child Welfare Meeting at the Grant Sawyer Building. There are thousands of children needing support and care in this state.

    I guess I'm in no sort of mood after hearing about some sad data and circumstances - to hear how Candian Billionaires can give us a few million and a few jobs and skip out of town with billions and billions. It's not as if these large corporations - Barrick and Newmont even attempt to cover up their profits and the dividends they are able to pay to their shareholders. Anyone can google their names and profits and see.

    When Nevada's gold is gone - we will be left with holes and poisin. And they will leave. They will not be loyal to Nevada.

    Mining declared and took $4.3 billion in deductions. All these loopholes need to be removed. Mining already has a Constitutional cap - it doesn't need to be able to deduct everything and the kitchen sink too.

    And the Mining and Accountability Oversight Committee (MOAC) is showing the auditing and inspections of these large corporations has not been appropriate either. We can do better and use that gold money to help and support the people and children in Nevada.

  15. "The human cesspool population will grow leaps and bounds as it's been doing for past 25 years."

    What's the human cesspool population, Mr. no hate whatsoever?