Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1930-09-18
IRON ORE TAXES

Inc recent decision OF the state
supreme court in ordering the Oliver
Mining Co. to pay their just dues to
the state according to law is COM
mendable. 1t is a good public policy
for the benefit of the masses of Min
nesota taxpayers. The steel corpora
tiOns and iron mining companies have
been amaSSing tremendous fortunes
and they are much more able to pay
big taxes to help support the state
government. They also receive more
benefits from the state and it is only
just and natural that they pay this
iron ore tax. We heartily commend
the state supreme court for their de-
ciSion.
Following is a report on the tax
reduction that was sought and the
action taken by the state supreme
court:
Iron mining companies operating
in Minnesota must pay a per cent
tax on the value of all ore produced
at the mouth of the mine and are not
permitted first to deduct the state
royalty tax, the State Supreme Court
has ruled.
The case was brought to the SUI
preme Court by the oliver Iron Min
ing Company, which asked a review
of decision by the Minnesota Tax
Commission. The commissions de-
cision relative to the per cent tax
was upheld.
The state law says that the min
ing company must pay 6 per cent
occupatiOnal tax at the mouth of the
mine on the value of all ore mined.
Because there is no market at the
mouth of the mine, the value is fixed
by taking the value at lower Lake
of transporting the ore there.
Approximately 80 per cent of the
ore mined in the state is from pits
that are under lease, and royalties
are paid to the owners. Accordingly,
the state also passed a per cent
tax levy on these royalties, making
uniform tax on all receipts of
money from iron ore. The two taxes
are complimentary and supplement
tary.
Under previous decisions of the
Supreme Court, the mine operating
companies were required to pay the
royalty tax as well as the occupa-
ton tax.
The Oliver company, which was
forced to pay the royalty tax, at
tempted to deduct this amount from
the receipts for its ore at the lower
Lake Erie ports in addition to trans
portation costs in determining the
mine-mouth value of the ore The
Supreme Court decision declined to
permit it to do so, and also held that
this refusal does not force the COM
pany to pay two per cent taxes on
the same ore The opinion was writ
ten by Associate Justice Homer Di-
bell.
The Oliver companys royalties in
1923 were S6,SS6,540, of which S5,032,-
697 was subtracted from the value
of the ore mined. The royalty tax on
this was S301,961, the amount the
company insists should be deducted
Six per cent of this is S1S,117, the
amount which the company says it
was overtaXed.
The decision affects considerably
more than this amount, however, be-
cause if the Oliver company had been
successful in its contention, all other
mining companies operating under
leases would be entitled to similar
deductions.
While the Oliver company is the
only mining company to contend that
the state should deduct the royalty
tax from the value of the ore mined.
the state would have lost approx
mately $4,000 a year in taxes should
the decision of the Tax Commission
have been overruled by the Supreme
Court Approximately one-third of