Eastern Utah advocate. [volume] (Price, Utah) 1895-1915, 1915-02-12
MINING INTERESTS
PRESENT VIEWS

NJ. r. Braffet. who has been chosen
as the representative OF the mining
Interests OF the state 20 represent their
side OF the proposed new tax system.
In Mondays Tribune gave the follow
ing interview.
| Property In Utah II presumed 10
be assessed at It's full value. Section
2506 OF the Compiled Laws Of Utah.
under the title OF Taxation says:
All taxable property must be assessed
AZ It's full cash value and there are
three supreme court decisions saying
that property must be assessed at its
fair cash value; the price for which II
would sell In the open market.
How Mines Are Taxed.
I'm the case OF mines however,
there II a constitutional limitation
providing that all mining claims shall
be assessed az the price paid for them
TO the government. but that In addi-
ton they shall pay a tax on the full
amount Of their net proceeds This
constitutional provision was made for
the purpose OF encouraging mining
primarily. and secondariiy by reason
OF the fact that II Is practically inn
possible 10 determine the value OF a
mining claim.
For instance. on the day that the
assessor arrives they may have un-
covered rich strike that IL appar-
entity continuous inferrinR that eel
runs up Co the surface and Co consid-
cradle depth and beyond it's present
location TO the lines OF the property.
he would assess the property accord
ingiy, and the very next round OF
shots might find the end OF the ore
I merely give this illustration TO H.
lustrate the difficulty IN estimating
the value OF the property on that ba-
sis. ON the net proceeds plan. how
ever. the state receives It's just am
cunt for the net proceeds are taxed
TO their fun amount. that L. on a
basis OF 100 per cent.
Method of Taxing Mines.
For the sake OF an example. take
metalliferous mine capitalized at
100000 shares with 100000 shares
outstanding. Let the stock be selling
at IS cents per share. which would
represent $4,000 for the entire
property. The taxes OF such a COM
pany under the present law would be
aascascd upon the following basis.
Five dollars per acre for all min
erai land owned. which IN the price
that must be paid 20 the government
for the ground.
Improvements consisting OF hoist
Ing machinery. shaft house and all
other equipment on the surface. M
we'll M mine cars. the rails. the vari-
Gus machine drills. hand drills and all
such equipment
The net proceeds on the ore pro-
duced during the preceding year.
The United States excise tax. which |
In based ON I per cent of the net pro- |
ceeda. and finally the charter tar 20 |
the state % Utah.
Tho Net Procccds.
In determining the net proceeds |
for taxation purposes. no deduction IL |
permitted for moneys expended for
payment Of taxes. fire Insurance. en-
ploycrT liability insurance. the ex-
else tax. the charter tar OF personal
Injury judgments or adjustments. All
the property thus made subject Go |
the tax levied from seven 20 ten In
dependent funds. according 20 the To- |
cation OF the property and through |
out the state this win approximate |
more than 4 per cent with 4 Der
cent as a working basis. the taxes OF |
the mining company would be az fol- |
lows, suppoaing that II produced
sec. 0OOs
Proceeds. $4,000; tax. $1,000;
lands 100 acres. 1900; tar, sac; i'm
provements 5000: tar. ss2o: az. 81
excise tax. I per cent OF $4,000, $500; |
charter tax. $50, total. s27sO.
you must remember that this tax
becomes lien upon the property ON |
January I Of the year succeeding the |
years operation upon which the val |
uations are predicated. The company |
may have exhausted all OF lis ores
and may be levying assessments for
further exploration purposes Now
what In an assessor going 70 do with |
"A property no situated n the present |
measure Ia adopted This example In
taken from property actually oper-
ating In Utah.
Suppose that the Assessor ap-
praises the property while It's ores |
are being profitably extracted. He |
would very likely consider the selling |
value OF the stock. the number OF |
shares outstanding. and. IN lieu OF |
the mining claim valuation AZ now
assessed and shown at $500. would |
compute Is cents a share on the 500.
900 shares outstanding. making the
claims worth $4,000. Upon this ba-
sis the tax OF per cent would amount
To $500 less the $40 maximum OF the |
law as Il now stands. The taxes OF
the company would thus aggregate
1910, which would approximate near.
~ 20 per cent OF the entire proceeds
OF the property for one year.
III Ore Pinches Out.
This illustration Is predicated upon
a net proceed Income OF $4,000. Sup |
pose that the mine In the following
year earns no net proceeds. but has
TO levy assessments 90 carry on ex-
ploration work. The property would |
still be assessed with the $4,000 OF
improvements, the charter tax and
such further tax would be provided
for the valuation OF the claims as the |
assessor or the board OF equalization |
might determine. IL would be within |
the arbitrary power OF the assessor 20
continue the valuation OF 100000 |
and thereby TO bankrupt the company.
II can be readily seen that under such |
a scheme OF taxation as proposed by
IA