Assembly Speaker Jason Frierson and Nevada Mining Association President Tire Gray on the final day of the 81st session of the Legislative Assembly, Monday, May 31, 2021, in Carson City. Photo: David Calvert/The Nevada Independent
The discussion took place on Monday, January 10, at a workshop hosted by the Department of Taxation, which is tasked with developing regulations to implement the new tax approved in the final hours of the 2021 legislative session.
During the meeting, the president of the Tire Association Gray offered a handful of suggested tax rule changes, including a request to limit tax collections to mid-2021 and beyond (when the law is entry into force) rather than on the product of the complete calendar year. 2021 as indicated in the draft regulations.
Such a move would prevent the IRS from collecting tens of millions of dollars in revenue, but Gray said the state had never before attempted to collect a tax before the bill’s effective date, and that the concept of advance perception “frankly never came”. up” during the legislative discussions on the measure.
“It’s about justice and fairness,” Gray said Jan. 10. “To think of tax behavior that happened before the law’s effective date really goes against those ideas about due process.”
In an email, a Department of Taxation spokesperson said the office was unable to calculate the estimated difference in collections for a full calendar year versus a half calendar year.
The tax is an annual assessment on any state-based gold or silver mining business with annual gross revenue in excess of $20 million. The tax rate is 0.75% of all taxable income up to $150 million and 1.1% of all gross income over $150 million.
During the meeting, Tax Commissioner Sharon Byram said she tended to agree with Gray and said she was “surprised this is a retroactive tax because it’s not is not normally the case”.
Gray also requested that the tax be renamed to indicate that the proceeds will be earmarked for education, in place of the more generic moniker “gold and silver excise tax” currently proposed in the regulations.
“I would just like to ask if there is a possibility of this happening, so that future generations don’t confuse where these dollars are supposed to go,” he said. “These dollars are for our children.”
He also asked for clarification on parts of the draft regulations, including ensuring that mining operations focused on extracting minerals other than gold or silver that nonetheless encounter gold and money are exempt from payment of the tax. He further requested clarification on the definition of “entity”, saying that the tax was “always intended to operate in some way at the level of the mine” and not at the level of the legal person.
In a statement, Gray called the new levy a “mining education tax” and said the mining association “will continue to work closely with the Department to iron out any remaining wrinkles” with implementation.
The tax is the end product of furious behind-the-scenes bargaining between the Democratic legislative leadership, Gov. Steve Sisolak, and representatives from the mining industry, teachers’ unions and other powerful political players.
The Department of Taxation has scheduled a hearing to pass the regulations on January 24. If approved, the regulations would then move to the Legislative Committee, a 12-member group of lawmakers tasked with approving regulations made by state agencies.
Riley Snyder is associate editor of The Nevada Independent, a 501(c)3 nonprofit news organization. The following individuals or entities mentioned in this article are financial supporters of Indy: Nevada Mining Association – $21,500; and Steve Sisolak – $3,200. This story
