Monte L. Miller is the president of Nevadans United for Fair Mining Tax, Inc and argues that the answer is no.
In 1989, voters approved a constitutional amendment to the net proceeds of minerals tax of five percent which capped this tax at five percent in the Nevada Constitution. For 22 years, individuals and businesses have seen new taxes implemented and every fee and tax in Nevada raised, many several times. As the price of gold has moved up over 300% to over $1,600 per ounce, the mining net proceeds tax could not be raised.
Nevadans United for Fair Mining Tax, Inc. simply believes that raising the cap, not raising the tax, enables the legislature to have the mining industry participate when and if taxes are raised on individuals and other businesses.
The idea that Nevada’s mining industry has not participated in a tax increase in the last 22 years is even more profound when you consider the fact that they are mining precious metals like gold and silver, a non-renewable precious metal in the ground in Nevada. Nevadans only get one chance at a fair share when it comes to precious metals – when it’s gone, it’s gone, and the mining companies are gone too. That is the history of mining in Nevada.
Taxes on gold mining companies in the Canada’s providences range from 13% to 15%. The tax rate on precious metals mining in Colorado is 2 ¼ % of gross proceeds, plus a 4.63% corporate income tax. The bottom line is that Nevada’s taxation on the mining industry is the lowest in the United States, Canada, and many places in the world where precious metals are mined.
Nevadans United for Fair Mining Tax’s goal is to let the gold mining industry’s taxes be raised when Nevada’s legislature and Governor decide to raise taxes in Nevada. This has not been the case for 22 years.
Tim Crowley is the president of the Nevada Mining Association and argues that the answer is yes.
A Nevada businessman, Monte Miller, is promoting a potential 80-percent tax increase on all mining operations throughout the state. This narrowed focus on one industry is indicative of the shortsighted thinking that has contributed to the state’s current economic predicament.
Making our state’s budget dependent on one or two industries binds the viability of our state’s economy to the cyclical reality of those businesses, an obvious risk illustrated by the recent tourism and gaming downturns and subsequent economic fallout. Likewise, the minerals industry is subject to significant ups and downs. As recently as the first week of March, gold prices fell by nearly 10 percent in just a few days.
Today, mining in Nevada is experiencing considerable diversification. High-demand materials such as copper, molybdenum, lithium and geothermal heat are abundant in our state, and bringing these to market will greatly benefit Nevada’s economy. The capital funding for these operations, the resulting job growth from mining expansion and the resulting tax revenues from this growth could all be shut down by the excessive tax liability proposed by Mr. Miller.
Yes, mining should pay its share of taxes—and it does. Currently, mining is one of four industries – along with gaming, banking and insurance – that already pay taxes at a rate beyond what all other state businesses pay. Mining corporations pay the same taxes – sales and use, payroll and property taxes – as EVERY Nevada business, PLUS an additional $200 million per year in a net proceeds tax that no other businesses pay. Mining industry tax contributions from 2010 through 2011 will exceed $600 million. While just the ninth largest economic sector in terms of state GDP, mining pays more taxes per employee than the eight leading sectors. Mining does this while sustaining a workforce of more than 60,000 direct employees and supplier employees, and paying the highest average salaries in Nevada.
Mr. Miller is suggesting changes that would hurt the state by asking Nevadans to rely disproportionally on the volatility of commodities to provide the budgetary stability for essential services such as education, public safety and health care.