The passage of Question 2 on the Nevada state ballot will remove 150-year-old constitutional provisions for the kind of mining that allows for high salaries, increased revenue, and the industry’s overall success.
In an effort to modernize mineral taxation laws in Nevada, this year’s state ballot is giving voters the opportunity to repeal parts of the Nevada Constitution concerning requirements and restrictions on mineral taxation, claims, and tax revenue distribution. Should the ballot be approved, the Nevada State Legislature would be able to propose new laws, thus changing the existing system of mineral taxation, claims, and extraction.
The Current Provisions and what Happens Next
In an article on Watchdog Wire, the Nevada-based editor Michael Chamberlain defines the current provisions and explains what would happen if voters pass Question 2 on the ballot. He notes that the current tax is capped at 5%, but that, should the ballot item pass, mines and mining claims would no longer be exempt from real property taxes. This initiative would also enable the state to levy mineral and proceeds taxes. According to Chamberlain, in order to fill the “giant vacuum with respect to mining taxes” that would be created with the ratification of Question 2, the state legislature passed SB400 in 2013. SB400 “imposes an excise tax upon mineral extraction to replace the net proceeds of minerals tax that Question 2 would repeal” and lays the groundwork for future legislatures to increase taxation of the mining industry.
Change in Need
Many Nevadans, however, are in favor of passing Question 2. Bob Fulkerson, state director of the Progressive Leadership Alliance of Nevada, thinks the special protection that only the mining industry receives should be removed. In an article in the Las Vegas Review-Journal he claims that Nevada’s mining taxes are inconsistent with the global market.
The Lifeblood of Rural Nevada
Congressman Mark Amodei, a Republican representing Nevada’s second district, argues against new mining tax laws . On his website, Amodei points out that “more taxation, regulation, and litigation will not create more jobs.” Amodei recently set forth his thoughts on Nevada mine tax policy in an article in the Las Vegas Review-Journal. He observes that the mining industry as a whole–as well as the high salaries associated with this sector–are “a major source of revenue for state and local governments,” and that, with the generous pay, “mining industry employees can afford to buy homes, pay their mortgages, pay for their health care, and pay for the necessities of life, without government assistance.” Amodei also emphasizes the difference in perspective between rural communities that have extensive experience with mines, and uninformed urban districts that “have little or no idea of the years required and the millions of dollars in capital necessary to endure the permitting process and undertake exploration.”
Given the importance of mining not only in Nevada but also to the U.S. economy, a shift in policy would be detrimental to the industry as a whole. The industry has produced countless jobs and enabled industry workers to maintain not only a basic standard of living, but also a comfortable lifestyle. Midwest Industrial Supply, Inc. passionately supports the relationship between good legislation, good business, and good products. We believe that Nevadans should reflect carefully on their answer to Question 2 as they consider the prosperity that unique mining policies have brought to their state.
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