Elko independent. [volume] (Elko, Nev.) 1915-current, 1918-01-29


mining corporations OF the state have
no right TO deduct federal taxes in ar
irving at the net proceeds of mines.
This matter came up before the tax
commission some time ago upon a
hearing OF the Nevada Mine Opera
tors association, and was referred TO
the attorney general for his opinion.
The mine operators cOntended that
they had the right to deduct federal
taxes in addition to the deucuon per
mitted by the statute before paying
their bullion tax. This contention, had
II been correct, would materially re-
duce the revenue to the state and
various counties and would probably
cut the state and county taxes from
the mining industry almost 40 per
cent, especially in view OF the excess
profit provisions Of the federal law.
The opinion, which is of considerable
interest to the mining industry Of
the state, follows:
OdIsou Cll!i Jan. -, 1919.
Nevada Tax Commission, Carson City,
Nevada.
Gentlemen am in receipt OF yours
OF January 81, together with the en-.
closed letter from NJ. c. d. jenkins,
business manager of the Neva'la Con
solidated Copper company, relating to
the legality OF deducting federal taxes
from the gross proceeds of mines in
order to arrive at the net proceeds for
the purpose Of taxation.
Concretely, the question presented
by the correspondence is, may min.
ing company deduct federal taxes from
the gross proceeds of mines in arriving
at the net proceeds, the basis of taxa.
ton. Section 1857 of the Revised
Laws provides as follows:
"All proceeds of mines, including
ores, tailings, borax, soda and min
eralbearing material, of whatever
character, shall be assessed for pur
poses of taxation, for state and county
purposes quarterly in the manner fol
lowing: From the gross yield return
ed. or value of all ores, tailings, boray
soda or mineral-bearinG material o
whatever character, there shall be de
Quoted the actual cost of extracting
said ores or mineral from the mine
the actual cost of saving said tail
ings; the actual cost of transportation
to the place of reduction or sale, ant
the actual cost of reduction or sale
and the remainder shall be deemed tn
net proceeds. and shall be asscssc
and taxed at the same rate ad valol
EN-, as other property is taxed, as pro
vided in this act; ."
The section referred to is section I
of IAN Act to provide revenue for tn
support of the government Of the stat
Of Nevada and to repeal certain act
relating thereto" which was approve
March %, 1891.
II will be observed from the scCtio
just referred to that 1t is the net pre-
ceeds Of mines that should be asscssc
and taxed; and tho term met pr
ceeds" is defined a. being the gros
yield or value Of the ore less II
actual cost OF extracting; the aclut
cost OF transportation to the plaC
OF reduction or sale: and the actuj
cost Of reduction or sale"
II will be further observed that
is ret proceeds and not met incom,
that is to be taxed under the prov
sions OF this section
This section was adopted under ~
provisions OF section OF article 10
the constitution as il then existe
which provides:
1.-THE legislature shall provide I
law for a uniform and equal rate
assessment and taxation. and sha
prescribe such regulations rs shall 81
cure a just valuation for taxation
all property, real, personal and pc
sessory. excepting mines and mimi
claims, the proceeds OF which aloi
shall be taxed, and also excepting SUI
property az may he excepting SUI
property as may be exempted by In
for municipal. educational. literar
scientific, religious or charitable pit
poses"
1t will be observed from the origin
section l OF article 10 that Il was L.
to the legislature to tax the proceo
of mines and they could tax either q
gross or the net in the exercise
their legislative discretion. Section
OF article 10 was later amended an
as amended and approved by the pc
pie at the general election Of 49,
reads as follows:
THE legislature shall provide
law for uniform and equal rate
assessment and taxation. and shi
prescribe such regulations az shi
secure Just valuation for taxatl
Of all property. real, personal a
possessory, except mines and mini
claims, when not patented, the d
ceeds alone Of which shall be assess