NV Mines: Minimal State Taxes Paid, Despite Record Profits
June 27, 2012
LAS VEGAS - Updated numbers will be presented to the state's Mining Oversight Commission on Thursday that experts say show record profits - and a very small contribution to Nevada's general fund.
Tax-research consultant David Kersten, owner of Kersten Communications, still is compiling the report but says the big picture is clear. Numerous state exemptions allow local mines to only pay taxes on about a third of the value of the precious metals they extract. Kersten says they pay a state tax of just 5 percent on that smaller value.
"So, it really works out to just $71 million on a total of $6.6 billion in the value of what they extracted."
Mining industry lobbyists say the companies also pay the modified business tax and sales tax to the general fund. But Kersten says all businesses pay that, and thinks the state is too lenient about the mining tax. He compiled the report for the Progressive Leadership Alliance of Nevada (PLAN), which will present the findings to the Mining Oversight Commision on Thursday.
Kersten, who is updating the 2009 report called "Fool's Gold," says it shows that, while Nevada ranks near the bottom in taxing mines, the industry is enjoying record profits.
"Newmont called itself the 'Apple of gold stocks.' These companies, their profits are up 20 and 30 percent, even more - and compared to a few years ago, they have huge growth in profits and production."
Of the 13 Western states where mining is active, he says Nevada is all but alone in handing out such sizable tax breaks to the industry.
"Every other state except for Alaska taxes on the gross value of gold. Nevada's unique in that it allows all of these deductions."
The commission was created to oversee the industry's tax burden, its impact on the environment and where mining fits into the state's economy. It is to meet at 10 a.m. Thursday in Room 2135 of the Legislative Office Building in Carson City.
See the 2009 report online at planevada.drupalgardens.com. The new report will be posted at planevada.org.