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Governor open to reducing mining tax deductions, spokesman says
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LAS VEGAS REVIEW-JOURNAL
Updated: Apr. 10, 2012 | 11:00 a.m.
Gov. Jim Gibbons would consider reducing the number of tax deductions available to the mining industry to help close a state budget shortfall estimated at $871 million, a spokesman said Monday.
"The governor is certainly open to adjusting the deductions that mining gets to take," said Gibbons spokesman Dan Burns. The administration calculates that eliminating some mining tax deductions could bring in an estimated $25 million annually.
Such a proposal would not violate the governor's pledge to balance the budget without raising taxes, Burns said.
"If you remove deductions, that is not a tax increase."
The mining deduction question is not, however, included in the governor's evolving agenda for the upcoming special session of the Legislature.
But Burns said, "Any item can be added by amendment at any time very, very quickly."
Limits on taxing mining are included in the state's constitution dating to 1865. The tax advantage has been the target of citizens frustrated with cuts to state services, but the industry has succeeded in beating back proposals for change.
Still, leading Democrats, who have bemoaned proposed cuts to education and health and social services, declined to comment on the governor's suggestion.
Dave Berns, spokesman for Senate Majority Leader Steven Horsford, D-Las Vegas, said Horsford was unavailable to comment on the issue of mining tax deductions Monday evening.
Assembly Speaker Barbara Buckley, D-Las Vegas, did not return a call for comment.
Both Buckley and Horsford have said they oppose raising taxes in the special session.
Tim Crowley, president of the Nevada Mining Association, said that before Monday, he had not heard any talk from the governor regarding the possibility of restricting deductions.
"We've never discussed this as far as I know," Crowley said. "My first step is to verify the governor's intentions."
To increase the tax rate on net proceeds from mining would take a constitutional amendment. But the Legislature and governor have the power to reduce the deductions mining companies use to reduce their tax burden.
Marketing is an expense that mining companies can deduct to reduce the net proceeds on which they are taxed.
Beyond marketing, it was unclear what deductions the Gibbons administration examined to arrive at the $25 million figure.
Other proposals to extract more money from the mining industry have included asking it to pre-pay taxes, as it did for 2009, but Horsford said that he opposes the proposal because such a move merely would add to future budget shortfalls.
Crowley said the mining industry is open to the possibility of increases in the amounts of fees it pays to government agencies such as the Nevada Division of Environmental Protection and the Nevada Commission on Mineral Resources.
But he characterized the deductions as crucial to fairly taxing mining on the value of its property.
"Tax the value of the mineral, not the expense to get it to a commercial user," the Nevada Mining Association said on its Web site.
Such talk about mining taxes is going on at the same time that a petition is being circulated by the Progressive Leadership Alliance of Nevada.
The group is seeking a constitutional amendment to increase the mining tax rate and charge taxes against gross proceeds, as opposed to the current net proceeds tax.
Such an amendment would require a vote by the people in 2010 and again in 2012 and could not go into effect until at least 2013.
The Nevada Mining Association has filed a lawsuit to stop the petition.
Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.
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Maybe some state workers can mine and some more can be bagging the treasure and sending it to Cash 4 Gold.
Budget problem solved.
We talk about fair and equal taxing instead of over taxing. Well this creates a more fair tax.
Gaming tax is based on gross and not revenue. Why should mining be any different.
Remove those deductions and possibly help balance out tax revenue to tax dispersion. Meaning Clark County population and gaming help pay for much of the tax burn found North of the county border.
Possibly with Mining paying some more that will help balance the tax revenue needs per region.
If this story is so, I beg the journalist to investigate Clark County Business License employees like supervisor T Ann, Dan Hoffman, Gary Torgerson all under Jacqueline Holloway which also has a shady history of work ethics.
You will find one indicted outside of the US on money scandals and how about a top of the line Corvette for $85000 around August 2009, Cash! I'm just saying- these are Clark County workers on Public Resources funds !!!!!:-) Good Luck.
I wish the Governor and Nevada legislators would learn something from Hollywood: A percentage of the net income of a business venture, when you don't control the venture's expenses, means you get ripped off.
Art Buchwald learned that fact, in his extensively litigated case involving a net profits deal for the making of one of his stories into a movie. He got nothing.
The Buchwald trial exposed "creative accounting" as standard operating procedure in U.S. business.
All of the big move stars and directors insist on a percentage of the GROSS as their pay, not a percentage of the net.
Obviously, if Nevada continues to tax a mineral extractor's net income, it will prove that the Legislature and the Governor are dumber than Hollywood movie stars!!!!
Tax this, tax that. Thats what everyone seems to think will resolve all the problems.of Gov't on every level overspending. Colorado Voters passed a Bill awhile back that made it law that any tax increase of any type must first be put to a popular vote. Gov't crys about it, says its killing the State. But Gov't always seems to make it! tighten your belts people! Raising Taxes on big business just because, is bad policy. Take Ely, NV. It cannot afford to have layoffs or worse, closures.It would devastate their economy! Taxation is not the answer. Gov't fiscal responsiblilty is!
Dont worry folks.
This IS Nevada, after all.
Government of the corporate lobbyist, for the corporate lobbyist, BY the corporate lobbyist shall not perish from the Silver State.
...p.s. yes, girls, The Gov IS available! Line forms to the right....no..further right...a little further...