Comments (19) | Add a comment
Nevada mining industry avoids audits
Tools
LAS VEGAS REVIEW-JOURNAL CAPITAL BUREAU
CARSON CITY -- Legislators expected shock and awe Thursday after the Department of Taxation director testified he does not have any auditors trained to determine whether the mining industry properly pays its state taxes.
"I am going to have to start taking blood pressure medicine," responded Senate Majority Leader Steven Horsford, D-Las Vegas. "We have a huge increase in net proceeds (taxes), and you don't have anyone with the skills set to look at these companies at a time we have an enormous challenge with our shortfall."
Horsford made his comments during a Senate Revenue Committee hearing after state Taxation Director Dino DiCianno said he has not had auditors for two years who are familiar with Nevada's complicated tax law on net proceeds of minerals. DiCianno added he never told Gov. Brian Sandoval of his staffing problem.
The revelation comes at a time when Democratic legislators are looking for additional revenue to cover a budget they think is $2 billion to $2.5 billion short of the state's needs. Sandoval and Republicans oppose any tax increases and want to approve the governor's $5.8 billion budget without changes.
Sandoval reported Thursday that mining tax collections for the coming year will be $10 million more than previous projections and that the extra money would be set aside for education.
Senate Revenue Committee Chairwoman Sheila Leslie, D-Reno, called it "ridiculous" for the governor to think he alone can decide where funds are spent. She said that money will go into the general fund. Legislators, working with the governor, would decide where it is spent.
Both Terry Rubald, chief of the Taxation Department's assessment division, and mining lobbyist Jim Wadhams told the committee they do not think the mining industry is shorting the state of tax revenue.
But Rubald said mining largely "operates under a self-reporting tax system."
Mining companies last year made an advance payment to the state of about $85 million in net proceeds of minerals taxes.
The tax is calculated after taking the sale price of gold or other minerals and then deducting legally allowed costs of extraction, transportation, depreciation, marketing and other costs.
The advance payment is supposed to cover next year's payment on mineral taxes to the state, but Sandoval has proposed delaying that for two years.
Progressive Leadership Alliance of Nevada lobbyists questioned whether mining is cheating the state on tax payments.
PLAN President Bob Fulkerson said mining companies reported to shareholders in their annual reports that 30 percent to 40 percent of expenses go toward extracting and producing the finished minerals, while they claim to the Taxation Department that 70 percent to 80 percent goes to these costs.
"Why is there such a huge discrepancy?" he asked.
As it stands now, PLAN lobbyist Jan Gilbert added, mining pays less in net proceed taxes than the amount of taxes paid to the state by rental car companies.
PLAN, a liberal-leaning group , has been trying unsuccessfully for several years to induce the Legislature to increase mining taxes. Its efforts have been met with lawsuits from the mining industry.
Tim Crowley, president of the Nevada Mining Association, told legislators his industry pays all of the taxes that every other business pays in addition to the net proceeds tax.
Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.
Comments
Terms & Conditions
The following comments are provided by readers and are the sole responsiblity of the authors. The Review-Journal does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please use the Report Abuse button.
Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 24 hours. Please do not submit a comment more than once.
Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.
RSS
Twitter
Facebook
They are going to take 4.2 BILLION in deduction?
Meanwhile, my 6 year old students were told be the governor to SACRIFICE at a rate of $300 each.
I guess if you are the governor you give away to the rich billionaires and stomp the 6 year olds in the neck?
BILLIONS. . . that is a lot of money! Could solve our entire budget crisis right?
Provoke: I understand your conclusion and cannot argue with it. As the taxpayers we must DEMAND that investigators and auditors be hired, funded, trained, and supported. I saw a lot of audit appeals (within Taxation) where they gave away the audit findings (and tax money not paid in when due) for "political" reasons. NO ONE IS LOOKING AT WELFARE FRAUD--we're not even looking. You want to bet that illegal Hispanics aren't milking the systems? Bad enough when Americans face an economic hardship and must ask for help. Worse when Americans milk the system. MOST FRAUDLENT: When illegals milk our systems.
You've got to be kidding! "The Department of Taxation director testified he does not have any auditors trained to determine whether the mining industry properly pays its state taxes." Why not? This state is absolutely inept when it comes to auditing and investigations of all types. It appears that keeping state regulatory agencies untrained, understaffed, and underfunded insures that we don't stifle business. Even with the laxness, tax incentives, cheap housing, and good weather, few companies want to move to NV.
Mines do NOT pay Sales and Use Tax. See NRS 372.270.
"Ladies and gentlemen, your corporate masters at work". Capitalism folks, ain't it just great? Thieves, liars, and cheats, taking YOUR money at EVERY turn. Its gross, its sickening, and worst of all, its CRIMINAL. Where are the attorneys general here? Get them busy and prosecute these thieves now!
Slammy: MANY WELFARE RECIPIENTS ARE NOT AMERICANS--families of anchor babies receive multi millions from Nevada welfare agencies--MEDICAID is gonna bankrupt us--the 50% state share for all these people. One anchor baby and the family gets TANF/Cash assistance, MEDICAID, LIHEA, EBT food stamps, free counselling / life skills training. ADD IN THE ILLEGALS using a cousin's birth certificate to CLAIM THEIR CHILDREN ARE ANCHOR BABIES. WE NEED AUDITORS AND FRAUD INVESTIGATORS--preferably former detectives. And we NEED REGULATIONS AND LAWS to enable enforcement limiting benefits to Americans. DEPORT THE THIEVES.
Not sure an AUDITOR COULD DO MUCH--the Tax Commission hasn't issued any relevant TAX REGULATIONS ON THE MINING INDUSTRY--so MINING COMPANIES DEDUCT THEIR OVERHEAD EXPENSES AT CENTRAL OFFICES from the proceeds of Nevada mines. Ask any accountant how to ALLOCATE expenses and AMORTIZE large sunk costs, setup costs, intangible expenses.....PRETTY CLEAR THE MINES ARE NOT PAYING ON ACTUAL PROCEEDS OF MINES.
Nevada is a Third World nation, just look at how foreign mining firms take our states minerals at great profit while paying Nevada little.
Congrats Gov Sandoval!
Cut cut cut Nevada´s budget and stick it to whats left of the middle class and poor while letting foreign miners take our states wealth, when even a extra 15% tax on those record mining profits could save our state.
Shared sacrifice huh? What bulls**t.
I m a republican, and this even made me think about calling for the nationalizing of Nevada s mines because us Nevadans are getting mega shafted. Seriously..
AND they make money manipulating the market . . . which they virtually control because of Nevada's gold. These people are definitely not paying their fair share.
Anyone with an MBA - can look at those corporation records and tell something fishy is going on. COOKED BOOKS.
AND they have the nerve to advise a governor to stand up in front the entire state and say . . . we should all sacrifice . . . especially kids.
The Casino and gaming industry pays higher tax rates than any other industry in Nevada and has for decades.
Tax that corrupt mining companies at the 3% rate like they are supposed to be taxed at and REMOVE ALL DEDUCTION, ALL OF THEM, NO MORE MINING DEDUCTIONS.
They made over 8billion dollars last year and paid in .5% in taxes. Barick and Newmont demanding unreasonable deduction for half a century is why we have no funding for anything.