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NV Mining Tax Unresolved as Legislature Adjourns

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"Lawmakers backpedaled on a mining tax-deduction deal."

Mineweb, Dorothy Kosich

In the last-minute flurry as the Nevada Legislature rushes toward adjournment Tuesday, state lawmakers backpedaled on a tax deduction deal with the mining industry.

Earlier Sunday evening, mining lobbyists had thought they had preserved major net proceeds of minerals deductions for sales tax and employee health care costs.

However, the chairs of the two critical State Senate fiscal committees let mining keep health care deductions but not sales tax. The change created a $12 million deficit in the proposed 2011-13 state budget, which mining promised to cover.

But only minutes later, the senators reversed themselves and refused to allow mining companies to keep their health care deductions. However, they agreed to let mining companies resume taking the health care deduction in two years.

In the original budget deal, six of Nevada's major mining companies agreed not to seek a refund on their portions of the increased mining claims fees recently deemed to be unconstitutional by a state district court. The new deal no longer holds those companies to that commitment.

This meant the Democratic leadership then had to replace the $38.9 million lost because of the court decision.

The Nevada Mining Association had not responded to Mineweb's request for comment by deadline early Monday, which is atypical for NvMA President Tim Crowley.

Meanwhile, the Senate Revenue Committee amended and approved SB493, which limits net proceeds of minerals tax deductions, such as marketing costs, fire insurance, employee housing, severance pay, out-of-state travel, and federal, state or local taxes. The bill also eliminates the now unconstitutional mining claim fee.

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