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April 16, 2014

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Nevada Senate votes to remove mining’s protected tax status

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Cathleen Allison / AP

Nevada Sen. Pete Goicoechea, R-Eureka, speaks on the Senate floor in opposition to a resolution that would take mining tax limitations out of the state Constitution. The Senate approved the measure at the Legislative Building in Carson City on Monday, April 1, 2013.

With minor opposition from some Republicans, the Senate on Monday approved a proposed constitutional amendment to strip the mining industry of special tax protection.

Before the 17-4 vote, Sen. Ruben Kihuen, D-Las Vegas, said this proposal, if enacted, will give future Legislatures the chance to determine tax rates on mines. The measure was approved unanimously in the Revenue and Economic Development Committee, of which he is chairman.

This resolution, Sente Joint Resolution 15, was approved by the 2011 Legislature and if it's passed by the Assembly this year will go on the election ballot in 2014.

Proponents question whether mining is paying its fair share in taxes from the production of gold and other minerals. Opponents argued the mining industry spends millions on exploration and pays high wages to its workers.

Voters in 1989 approved a constitutional amendment that sets the net proceeds tax on minerals not to exceed 5 percent. No other tax may be imposed upon a mineral or its proceeds under that amendment.

Senate Majority Leader Mo Denis, D-Las Vegas, said passage of SJR 15, which repeals the tax protection, would not increase or decrease taxes on the industry. It would enable the 2015 Legislature to examine the state’s tax structure in its entirety.

Sen. Pete Goicoechea, R-Eureka, said he is concerned about the long-term repercussions of this bill, opening the door to tax increases.

Sen. Don Gustavson, R-Sparks, argued the presents an “uncertain tax environment” for the industry, whose mines are mostly in rural Nevada.

Sen. Barbara Cegavske, R-Las Vegas, said the state is trying to attract industry including mining to diversity its economy.

She compared the tax breaks given Apple to locate in the Reno area, saying that company will have a tax rate of less than 1 percent. She argued that mining pays its workers an average of $87,000 a year.

Sen. James Settelmeyer, R-Minden, joined the other three Republicans in voting against the bill.

Senate Minority Leader Michael Roberson, R-Las Vegas, who backed SJR 15, would also like voters to consider a tax increase on the industry in 2014.

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  1. Really? Unbelievable!

  2. WOW!!! Let us hope the Assembly has the same good sense!