US Nevada Tax Commission opted to restrict a new tax rate collected from gold mining businesses

A majority of the Nevada Tax Commission decided to affirm that a new tax rate collected from gold mining businesses would be restricted to the period beginning in mid-2021 and continuing through 2021, rather than the whole calendar year 2021, as previously proposed by lawmakers.

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Progressivists, including Christine Saunders, policy director of the Progressive Leadership Alliance of Nevada, voiced dissatisfaction with the commission’s decision to make adjustments in response to the Nevada Mining Association’s request.  As a result, Saunders believes that the commission should “preserve what was voted on with bipartisan support and in plain view of the public, rather than manipulating the wording included in the legislation throughout the regulatory process.”

The state proposed a new tax on gold and silver mining, and the Nevada Mining Association asked that the title be changed and that the tax not be retroactive.  Tax collections should be limited to mid-2021 and beyond, rather than the entire calendar year 2021 as specified in the draft rules, as advocated by Association president Tyre Gray.  Gray said the state had never sought to collect a tax before the bill’s effective date and that early collection “really never came up” during legislative talks on the proposal.

“We ask you to return back to the basic document given by the tax department without the revisions,” said Saunders, whose group has been critical of mining companies, arguing that they are not paying sufficient taxes.  Similarly, Chris Daly, a lobbyist for the Nevada State Education Association teachers union, concurred with Saunders, saying that the industry should support the earlier start date and provide funding to public schools, which are experiencing an unprecedented crisis.

Because of differing interpretations of AB495, a statute legislators approved last year as part of a deal to send more money to education while also responding to requests for more taxes on the mining sector; there has been uncertainty and controversy about when tax collection should begin.  Estimates indicate that the tax will generate roughly $83.3 million in revenue in the fiscal year 2022 and $81.3 million in revenue in the fiscal year 2023.  According to the bill, one provision refers to the retroactive application of the law, while another portion states that the law is only applicable as of July 1st.

Mining association president Tyre Gray said that for a statute to be applied retrospectively, it must express clearly the legislative purpose of the legislature, which he did not feel was the case with AB495.  Tax Commissioner Sharon Byram concurred with Gray, stating that it has been more than 15 days since the vote was held and that there is a due process issue that the taxpayer was not given prior notice of the decision.

When asked whether her membership in the Nevada Mining Association had any impact on her decision, Byram said that she had been a member for most of the previous 30 years but had no effect on her decision.  In light of the recent comments, commissioners convened for a vote to assess whether or not their viewpoints had changed since their previous meeting on January 24th.  Commissioners James Devolld and Francine Lipman were the only ones who did not vote to confirm that the results of the last meeting were valid; the rest of the commissioners abstained.

The Department of Taxation will speed the delivery of forms and instructions now that the regulation wording has been approved, allowing mining companies to pay by April 1st, 2022.

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