The Eureka sentinel. [volume] (Eureka, Nev.) 1902-current, 1913-09-20
AGREE ON BASIS
FOR TAXING MINES
Companies To Pay This Year On
so Per Cent Net Bullion
Production

cation appeared before the NeNdod
Tax Commission last week and an
agreement was reached regarding
the assessment of this industry for
the year 1913. The Commission con-
tends that as a result of this con-
ference the assessment of the mines
is placed for the first time in the
history of the State on a scientific
basis.
The original constitution of Nevada
exempted mining ground from taxa
ton, but provided for the taxing of
the proceeds. Legislative enactment
prescribed the manner in which these
proceeds should be determined and
required that they be taxed at the
general property rate. The statutes
provided as well for the assessment
of all property at full cash value, but
in Nevada, as elsewhere, the full
cash value" of property rarely ap-
peared on the assessment roll, each
county assessing its property on the
lowest valuation it could accept to
produce the necessary county revenue
on a comparatively high tax rate.
The mines, early in the game, found
a satisfactory method for reducing
their assessment while still literally
complying with the law, this being
effected through the fundamentally
of separate milling organizations
which, though really owned and con-
trolled by the parent mining COM
pany, still contracted with it to re-
duce the ores of the mine at a figure
which absorbed in a greater or less
degree the taxable profits of the
latter. The stockholders in the mine
were, under this system, making
small book profits on the mine itself.
but got substantial dividends from
the mill which were not taxable.
The law creating the Nevada Tax
Commission gave it greater powers
than had been conferred on the
county officers in the matter of al
lowances of mining costs, and a con-
ference was arranged with the newly
created Mine Operators Association
to determine what these allowable
costs we're to be. The mine oper-
ators contended at this conference
that the general property tax should
be exercised in the exact letter of
the law if they were to be assessed
on their actual net, and %contended
that the maintenance of the subsidi-
airy mining companies was a necessi-
ty in their case to prevent their car
rying an undue proportion of the
tax burden due to high tax rates
growing out of low valuations on
property in general.
They proposed as a remedy, dur
ing the period in which the Tax Com
mission was bringing all property
up to full cash value, that they be
allowed an arbitrary charge of three
dollars per ton for 1913, and less
amounts in succeeding years, to
equalize their assessment with the
general property assessment. The
Tax Commission declined this pro-
posal, but submitted a counter prop
osition which was adopted after
some discussion Wednesday. The
terms of this proposal were roughly
as follows:
That the mining companies should
at once abolish the milling organi-
cations as far as returns of their ac-
counts to the Commission were con-
cerned, and should in detail report
their actual expenditures and pro-
duction covering the entire year;
That no charges for the conduct OF
offices other than the mine office
should be allowed;
That interest on bonds and other
Indebtedness should not appear as de-
auctions from the gross yield;
That the cost of mine plants should
be reduced by depreciation charges
over the whole life of the mine, and
not as lump charges at the time OF
construction, and that no investment
in plant should be allowed to depre-
ciate to less than 20 per cent of its
original cost during its operation,
when depreciation charges should
cease;
That the improvements should be
assessed at the same percentage of