NV Miners Sue to Stop Constitutional Changes to Increase Mining Taxes


"NvMA files injunction against attempts to hike mining taxation through the initiative process."

With the filing of litigation seeking an injunction, the Nevada Mining Association has drawn its line in the sand against attempts to hike mining taxation through the initiative process.

However, Tim Crowley, NvMA president, said miners are very much aware that the timing of the lawsuit might be viewed unfavorably by Nevadans and Nevada voters during a time of global economic crisis as gold mining companies report record revenues.

Nevertheless, when it came to a proposal to change the state's constitution to permit mining to be taxed according to a 5% gross proceeds rate, Crowley told Mineweb the industry's options were limited to either shutting down or filing a lawsuit.

On January 18th, the Progressive Leadership Alliance of Nevada (PLAN), which advocates for social, economic and environmental justice for Nevadans, launched an initiative petition to ask voters to amend the constitution. The document caps mining taxation at no more than 5% of net proceeds.

During the 2009 session of the Nevada State Legislature, PLAN had pushed lawmakers to increase mining's taxes by $30.3 million annually. However, rural Nevada lawmakers said they would not support the legislature overall tax plan if mining taxes were increased.

At the time, PLAN Executive Director Bob Fulkerson declared, "When you have 24 lobbyists, you don't get taxed." Assemblywoman Shelia Leslie, D-Reno, warned that Nevada mining "is misjudging public sentiment that it is not paying its fair share."

Nevada miners volunteered to prepay their state net proceeds taxes in 2008 and will remain in prepayment mode until June. The NvMA has been meeting with the governor's staff, a former geologist and mining attorney, to determine how the sector can help the state in the short term and going into the long term.

"The industry has always stepped up" in times of crisis, Crowley said. But, miners also strongly believe in the need for a broad-based business tax in which all sectors pay.

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