•From 2000 through 2007, Nevada’s mining industry extracted and sold gold worth $25.5 billion, and paid taxes to the state general fund totaling $125.3 million, an effective gross state tax rate of one-half of one percent.
•Mine owners are allowed to write off expenses as deductions. Over the last eight years, the Nevada mining industry has deducted 79 percent of the value of gold production, and paid taxes only on the value of the remaining 21 percent.
•In any given year from 2000 through 2007, one-third to one-half of all the mines operating in the state produced gold worth hundreds of millions of dollars but reported zero taxable proceeds.
•Nevada's two largest gold mines, the Barrick Goldstrike mine and Newmont's Carlin Trend project, have reported zero taxable values during years when the mines have produced gold worth a half billion dollars or more.
•While the 5 percent Net Proceeds of Minerals (NPOM) tax rate is written in the Nevada Constitution and would take years to change, the deductions by which the mining industry avoids so much taxation are written in state statutes (NRS 362.120) and can be eliminated through legislation, raising tens and possibly hundreds of millions of dollars for the state budget as early as the next biennium.
Table 1. Nevada gold mine industry deductions from gross production value, 2000-2007 ($ million)
Table 3. Gross production value and reported taxable value at the Barrick Goldstrike mine ($ million)
Table 4. Gross production value and reported taxable value at Newmont's Carlin Trend project ($ million)
Source for all tables: Nevada Department of Taxation, Division of Assessment Standards, Net Proceeds of Minerals Tax bulletins. Annual bulletins for 2000 through 2006 are online in pdf format) in the Division of Assessment Standards archive. The 2007 report in pdf is online in the Taxation Department's publications section.
Nevada Mining Tax Deduction Facts independently prepared by Hugh Jackson, Nov. 20, 2008