Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-11-29
WOULD FIX AID AL0REM
BASIS FOR MINE TAXES
BY STUDY OF ENGINEER
(ContInued from Page one.l

Continued from Page one.)
commission, however, holds thai
the policy is not in accord with the
| principles now generally accepted
in this state.
Coming to the third policy, that
Of equalization, the commission de.
fines this as the policy of PLACING
the mining industry on precisely
1.-The same basis as other economic
interests of the state. The report
states,
Nj Agree on EqualiZa ton.
THE mine representatives them
selves avow that they seek no pref
erential treatment, and defend the
present method of taxing mines on
the ground that it achieves equality
Of treatment. We believe, then
that we can assume practically
united support for the view that
We should seek a solution of the
mine tax problem which will re-
suit in placing the mines in the
same position as other interests,
not in a better or worse position. -
The present system of taxation
| of mines is carefully studied by the
commission. Stress is placed upon
the legal definition of producing
mines, which are to be such as
are mined in good faith for the
mineral values thereof, with a fair
degree of continuity throughout
the year for which the same are
| assessed and on a scale reasonably
commensurate with the opportun-
| ity and difficulty of disposing of
/ the product thereof"
! The writer here wishes to inter-
| pose q comment of his own. 1t is
declared by the supporters of the
tonnage law that small mine can
not be operated to evade the law
that the local assessor or the tax
commission will require a reasona-
bic scale of operations as the law
provides. In the brief of the Cher
okee and Pittsburgh Coal Mining
company, praying a reduction from
500 and SAC an acre to about Sc
and 81, it was pointed out that the
mineral content of the Chandler
mine. embracing over two thousand
acres, was taxed on a net output of
$685. or thirteen cents an acre. The
Chandler mine Is located in a dis
trict where the spread between
gross and net should be large. Does
the sum of 1885 seem to represent
"A reasonable scale of operations?
Has the ColfaX county assessor or
the state tax commission made any
attempt to classify the mine as
producing.
Colorado Fayors Ad Valopm.
The commission points out in
the report that the met value of
output definition was apparently
copied from the Colorado law.
However,, the report shows that
ColoIado's tax commission is op-
posed to the continuance of this
law and in favor Of ad valorem
basis and quotes from the 1919 re-
port Of the Colorado state tax COM
mission:
This commission has consist
entity and persistently argued that
metalliferous mining property
should be assessed at its actual
value and not practically subsidized
as at present under existing laws"
The report then takes up the
y NpllIBl WHICH llAFu llit |
met value" basis for 1919 and 1920 |
as the average net value in dol !
lars of each producing mine :.
for the years 1916. 1917 and 1918" !
with the provision that the net |!
value for the current year should |
be used in case it were larger than |
the three-year average.
Concerning the met product" |
system the report says: ct should |
be particularly noted that the linn
itatiOns upon the extent to which !
a mine must be operated in order
to classify it as Il productive mine |
are couched in general terms so
that it is quite possible for a mine
to retain its classification as a pro-
ductiVe mine even when it shows
no net value In such a case its
valuation of mineral content would
be nil and it would plainly be to its
advantage to continue to operate
at loss indefinitely so long as that
loss is less than the taxes would be
on the mineral content of the mine
and of all its contiguous lands"
Net Income Poor Guide.
The distinction between net
value of output and met income"
as used for the purposes of the
federal income tax is pointed out
and the conclusion reached that
merely because a mine is not MAX
ing a met income" as the govern
ment uses the term, it does not
follow that it should not pay state
taxes Ike property in general.
The commission asks whether it
can be assumed that the value of
a mine and the mineral content of
al its holdings can be correctly
gagged by adding the value of sur
race improvements to the net value
Oh the output Concerning the
problem, it says:
Anyone who undertakes to de-
Tend the equity Of the present ar
rangement defining equity as
equality and uniformity as pre-
9cribed by the state constitution
must take the position that either
from year to year or in the long
run, the net product of single
year added to the value of the i'm
proyements results in a fioura
which approximatcs the total value
Of the mine. There is no other
lefense without shifting of /,
Sround. such as a plea for rela-
lively favorable treatment because
of special risks or special economic
deserts"
The net product of single wear
S branded as an arbitrary, un- !
certain and haphazard factor on
which to rest valuation of min
ng property. 1t is little short of
to assume, as this
method does tacitly assume, that
'apital values fluctuate as RAPIDLY
md violently as the net earnings Of
he operations of individual years
Who would seriously maintain. for
that the value of a coal
property with vast reserves sinks
o zero whenever there is no NET
profit as the result of n single
81 t~@Nio ~