CARSON CITY, Nev. — A Senate committee on Friday passed a bill clarifying what mining companies are allowed to deduct from net proceeds taxes and offered amendments on another bill to clarify how the proposed margin tax on businesses would be calculated for the mining and casino industries.
SB493 establishes a seven-member commission to oversee the mining industry — from taxes and environmental issues to worker safety and reclamation. The industry would still fall under various state agencies that have jurisdiction over those issues, but the commission would be the regulatory umbrella.
An amendment by Senate Majority Leader Steven Horsford spells out that costs for such things as lobbying, employee housing, severance pay, trade association dues, sales taxes and federal taxes would not be deductible.
The bill now goes to the Senate floor.
The committee Friday also passed SJR15, a proposed constitutional amendment that would lift a cap on net proceeds taxes paid by mining companies. The Nevada Constitution currently limits taxes to 5 percent of net proceeds — am amount determined after deductions.
SJR15 would need to pass the Legislature this year, again in 2013, and be approved by voters in 2014.
With gold prices at record highs, the mining industry has been under a microscope this session as legislators try to find any available revenue.
Nevada leads the nation in gold production and is sixth in the world behind China, South Africa, Australia, Russia and Peru, according to the Nevada Division of Minerals.
On the margin tax, an amendment to SB491 would exempt winnings by casinos, which are already taxes by the state. Another provision deals with net proceeds taxes paid by mining companies, and specifies those are not exempt.
The Senate Revenue Committee took no action on that measure Friday.
Legislative committees have been holding marathon hearings on SB491 and AB569, an overall Democratic tax plan. The Senate bill would replace existing business taxes that are based on employee wages with a system based on gross revenue. AB569 would impose a transaction tax on services.
Democrats say the bills combined would raise $1.2 billion and stabilize Nevada's shaky tax structure that is heavily dependent on tourism and gambling — industries prone to turbulent volatility in economic downturns.
Both bills face a questionable future because Democrats lack the votes needed to pass tax increases and override an expected veto by Gov. Brian Sandoval.