Bisbee daily review., 1918-12-08
DEFINES DIFFERENCE FROM TAX ABLE STANDPOINT OF DEvEL- oPING MINE AND ESTABLISHED MINE AND DEFINES MINING IN- VESTMENT
RESOLUTION IS BASIS
LAW AS IT STANDS WORKS PAR PECULIAR HARDSHIP UPON DE- VELoPINe PROPERTIES AND
 SMALL PRODUCERS; TAKEN UP WITH TREASURY DEPARTMENT

The dearest paper yet issued as defining the difference from a tax able standpoint of the developing mine and the established mine and as de fining mining investment and the diff ference between this and commercial investment. has been forwarded to the United States treasury department as a resolution from the Association of Arizona Mining Men. The resolution was written and presented by T. O. McGrath of Shattuek-Arizona and was adopted as presented.
 Interpretation of the mine taxation laws of the federal government, ac- cOrding to recent announcement, is up to the treasury department again without the aid of congressional amendments which it was hoped would be passed and smooth out some of the many complexities of the law as administered last year. The law as it stands works particular hardship on developing properties and small producers and properties under both development and production which have yet to attain a commercial basis or clear up their past invest ment accounts from which as yet no adequate returns have been received. It is the hope that among the recon mendatiOns which have been forward ed to the treasury department there will be found proposals which can be adopted and which will materially clear the situation. The resolution prepared by Mir. McGrath follows and should be carefully read by all inter ested in mining operations. particu- larly, however, those engaged in the smaller enterprises:
 Hon. Wm. C.. McAdoo. Secretary of
 Treasury, United States of America.
 Washington, D. c.
 TAXING THE PROSPECTOR.
 Sir: The present income tax law and treasury department rulings gov erning the collection of the income taxes makes no distinction between mines in the course of development and mines that have been proven and placed upon a producing basis This
  turns from development ore shipped from prospect and development mines as income before it is known whether or not such return will be income or capital returned.
 In order to bring this matter be- fore the treasury department at a meeting at Phoenix. Ariz-. October r.. 1918. the representatives of about 30 mines that are in the course of development met and adopted the fol- lowing resolution. which is respect fully referred to you for attention and decision:
 Suggestion for an addition to the
 treasury departments regulations
 governing the collection of the in
 come tax in order to protect the
 prospect and development mines
 from paying an income tax upon a
 return of principal.
 WHEREAS. The present federal acts imposing an income tax upon mining companies. and the treasury rulings governing the collection of the income tax. do not make any distinction between income received by producing mines that have developed sufficient ore to guar antee the return. or to warrant be- lief in the return. of the original cap ital invested in the business to the business. as we'll as a profit above the return of the original investment, and the income received by prospect and development mines that have not developed sufficient ore to guarantee the return. or the reasonable belief in the return. of the original capital invested in the business to the busi- ness: and.
 WHEREAS. The said federal acts and the treasury departments rulings do not protect the prospect and de- velopment mines that have not suffi- cient ore to guarantee the return of the original investment to the ousi- ness from paying an income tax upon the amount that receipts from ship ments of ore encountered in course