NV to Revamp Mining Deduction Regs

Senate Majority Leader Steven Horsford, D-Las Vegas, and the Tax Commission Monday agreed to begin a complete review and rewrite of regulations governing mining tax deductions.

Commission Chairman Bob Barengo said Horsford's original request for an emergency regulation clamping off some of those deductions has too many complications. He said the biggest is changing the rules in the middle of the tax year when miners have already paid their net proceeds of mines taxes in advance this year.

Horsford petitioned the commission for immediate change after he said research showed him that miners have convinced previous tax commissions to allow many more deductions than state law permits. Those include such things as employee housing provided by the mines, costs of employee pensions, salaries for corporate executives not even located in Nevada and general corporate business expenses. Even mining association director Tim Crowley agreed in a letter to the commission such things as employee housing, exploration and corporate regional costs aren't mentioned in statute, only in regulation.

The law, Horsford said, is clear that miners can deduct only the costs of actual extraction, transportation and refining ores. He said the law limits deductions "to those defined in statute and no others."

He charged that past tax commissions had overstepped their authority in granting so many added deductions.

But commissioner John Marvel questioned why, if that's true, hasn't the Legislature brought the matter up in the more than 20 years since those deductions were put in the rules.

"We need legislative guidance in interpreting the statute," he told Horsford.

He said, however, because of the problems with changing the rules midstream this year, he would agree to begin the formal regulation process, "as long as it's done expeditiously."