(REPRINTED WITH ADOPTED AMENDMENTS)
FIRST REPRINTA.B. 361
Assembly Bill No. 361–Assemblyman Marvel
March 14, 2001
____________
Referred to Committee on Taxation
SUMMARY—Revises provisions governing tax on net proceeds of minerals. (BDR 32‑1078)
FISCAL NOTE: Effect on Local Government: No.
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EXPLANATION
– Matter in bolded italics is new; matter
between brackets [omitted material] is material to be omitted.
Green numbers along left margin indicate location on the printed bill (e.g., 5-15 indicates page 5, line 15).
AN ACT relating to taxation; revising the provisions governing the reporting requirements, payment schedules and collection procedures for the tax on the net proceeds of minerals; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
1-1 Section 1. NRS 362.110 is hereby amended to read as follows:
1-2 362.110 1. Every person extracting any mineral in this state or
1-3 receiving any royalty:
1-4 (a) Shall, on or before February 16 of each year, file with the
1-5 department a statement showing [the] :
1-6 (1) The gross yield and claimed net proceeds from each
1-7 geographically separate operation where a mineral is extracted by that
1-8 person during the calendar year immediately preceding the year in which
1-9 the statement is filed[.] ; and
1-10 (2) The estimated gross yield and estimated net proceeds from each
1-11 such operation for the entire current calendar year and an estimate of all
1-12 royalties that will be paid during the current calendar year.
1-13 (b) May have up to 30 days after filing the statement required by
1-14 paragraph (a) to file an amended statement, if beforehand he [makes]
1-15 submits a written application to the department and the department finds
1-16 good cause to allow the amendment of the statement.
1-17 2. The statement must:
1-18 (a) Show the claimed deductions from the gross yield reported
1-19 pursuant to subparagraph (1) of paragraph (a) of subsection 1 in the
1-20 detail set forth in NRS 362.120. The deductions are limited to the costs
1-21 incurred during the [period covered by the statement.] calendar year
1-22 immediately preceding the year in which the statement is filed.
1-23 (b) Be in the form prescribed by the department.
2-1 (c) Be verified by the manager, superintendent, secretary or treasurer of
2-2 the corporation, or by the owner of the operation, or, if the owner is a
2-3 natural person, by someone authorized in his behalf.
2-4 3. Each recipient of a royalty as described in subparagraph (1) of
2-5 paragraph (a) of subsection 1 shall annually file with the department a list
2-6 showing each of the lessees responsible for taxes due in connection with
2-7 the operation or operations included in the statement filed pursuant to
2-8 subsections 1 and 2.
2-9 4. The department shall:
2-10 (a) Use the information reported pursuant to subparagraph (2) of
2-11 paragraph (a) of subsection 1 only to prepare estimates for use by local
2-12 governments in the preparation of their budgets; and
2-13 (b) Submit those estimates to the local
governments on or before
April 25 of each year.
2-14 Sec. 2. NRS 362.120 is hereby amended to read as follows:
2-15 362.120 1. The department shall, from the statement filed pursuant
2-16 to NRS 362.110 and from all obtainable data, evidence and reports,
2-17 compute in dollars and cents the gross yield and net proceeds of the [period
2-18 covered by the statement.] calendar year immediately preceding the year
2-19 in which the statement is filed.
2-20 2. The gross yield must include the value of any mineral extracted
2-21 which was:
2-22 (a) Sold;
2-23 (b) Exchanged for any thing or service;
2-24 (c) Removed from the state in a form ready for use or sale; or
2-25 (d) Used in a
manufacturing process or in providing a
service,
2-26 during [the period covered by the statement.] that period.
2-27 3. The net proceeds are ascertained and determined by subtracting
2-28 from the gross yield the following deductions for costs incurred during that
2-29 period, and none other:
2-30 (a) The actual cost of extracting the mineral.
2-31 (b) The actual cost of transporting the mineral to the place or places of
2-32 reduction, refining and sale.
2-33 (c) The actual cost of reduction, refining and sale.
2-34 (d) The actual cost of marketing and delivering the mineral and the
2-35 conversion of the mineral into money.
2-36 (e) The actual cost of maintenance and repairs of:
2-37 (1) All machinery, equipment, apparatus and facilities used in the
2-38 mine.
2-39 (2) All milling, refining, smelting and reduction works, plants and
2-40 facilities.
2-41 (3) All facilities and equipment for transportation except those that
2-42 are under the jurisdiction of the public utilities commission of Nevada or
2-43 the transportation services authority.
2-44 (f) The actual cost of fire insurance on the machinery, equipment,
2-45 apparatus, works, plants and facilities mentioned in paragraph (e).
2-46 (g) Depreciation of the original capitalized cost of the machinery,
2-47 equipment, apparatus, works, plants and facilities mentioned in paragraph
3-1 (e). The annual depreciation charge consists of amortization of the original
3-2 cost in a manner prescribed by regulation of the Nevada tax commission.
3-3 The probable life of the property represented by the original cost must be
3-4 considered in computing the depreciation charge.
3-5 (h) All money expended for premiums for industrial insurance, and the
3-6 actual cost of hospital and medical attention and accident benefits and
3-7 group insurance for all employees.
3-8 (i) All money paid as contributions or payments under the
3-9 unemployment compensation law of the State of Nevada, as contained in
3-10 chapter 612 of NRS, all money paid as contributions under the Social
3-11 Security Act of the Federal Government, and all money paid to either the
3-12 State of Nevada or the Federal Government under any amendment to either
3-13 or both of the statutes mentioned in this paragraph.
3-14 (j) The actual cost of developmental work in or about the mine or upon
3-15 a group of mines when operated as a unit.
3-16 (k) All money paid as royalties by a lessee or sublessee of a mine or
3-17 well, or by both, in determining the net proceeds of the lessee or sublessee,
3-18 or both.
3-19 4. Royalties deducted by a lessee or sublessee constitute part of the net
3-20 proceeds of the minerals extracted, upon which a tax must be levied against
3-21 the person to whom the royalty has been paid.
3-22 5. Every person acquiring property in the State of Nevada to engage in
3-23 the extraction of minerals and who incurs any of the expenses mentioned in
3-24 subsection 3 shall report those expenses and the recipient of any royalty to
3-25 the department on forms provided by the department.
3-26 6. The several deductions mentioned in subsection 3 do not include
3-27 any expenditures for salaries, or any portion of salaries, of any person not
3-28 actually engaged in:
3-29 (a) The working of the mine;
3-30 (b) The operating of the mill, smelter or reduction works;
3-31 (c) The operating of the facilities or equipment for transportation;
3-32 (d) Superintending the management of any of those operations; or
3-33 (e) The State of Nevada, in office, clerical or engineering work
3-34 necessary or proper in connection with any of those operations.
3-35 Sec. 3. NRS 362.130 is hereby amended to read as follows:
3-36 362.130 1. When the department determines from the annual
3-37 statement filed pursuant to NRS 362.110 the net proceeds of any minerals
3-38 extracted, it shall prepare its certificate of the amount of the net proceeds
3-39 and the tax due and shall send a copy to the owner of the mine, operator of
3-40 the mine, or recipient of the royalty, as the case may be.
3-41 2. The certificate must be prepared and mailed not later than April 20
3-42 immediately following the month of February during which the statement
3-43 was filed.
3-44 3. The tax due as indicated in the certificate prepared pursuant to this
3-45 section must be paid on or before May 10 of the year in which the
3-46 certificate is received.
3-47 4. [If the owner of the mine, operator of the mine, or recipient of the
3-48 royalty paid taxes pursuant to subsection 1 or 2 of NRS 362.145, the
3-49 certificate must indicate any deficiency remaining from the previous
4-1 calendar year or any overpayment of the taxes made for the previous
4-2 calendar year.
4-3 5. Any deficiency remaining from the previous calendar year, as
4-4 indicated on the certificate prepared pursuant to this section must be paid
4-5 on or before May 10 of the year in which the certificate is received.
4-6 6.] If an overpayment was made , [and subsection 1 or 2 of NRS
4-7 362.145 applies to the taxpayer for the current calendar year or the
4-8 taxpayer chooses to pay the tax pursuant to subsection 1 or 2 of NRS
4-9 362.145 for the current calendar year,] the overpayment may be credited
4-10 toward the payment due on [August 1 of the current calendar year. If
4-11 neither subsection 1 nor subsection 2 of NRS 362.145 applies to the
4-12 taxpayer for the current calendar year and the tax is paid on or before] May
4-13 10 of the next calendar year . [, the overpayment may be credited toward
4-14 that payment.] If the certificate prepared pursuant to this section shows a
4-15 net loss for the year covered by the certificate or an amount of tax due for
4-16 that year which is less than an overpayment made for the preceding year,
4-17 the amount or remaining amount of the overpayment must be refunded to
4-18 the taxpayer within 30 days after the certification was sent to the taxpayer.
4-19 Sec. 4. NRS 362.170 is hereby amended to read as follows:
4-20 362.170 1. There is hereby appropriated to each county the total of
4-21 the amounts obtained by multiplying, for each extractive operation situated
4-22 within the county, the net proceeds of that operation and any royalties paid
4-23 by that operation, by the combined rate of tax ad valorem, excluding any
4-24 rate levied by the State of Nevada, for property at that site, plus a pro rata
4-25 share of any penalties and interest collected by the department for the late
4-26 payment of taxes distributed to the county. The department shall report to
4-27 the state controller on or before [February 28,] May 25 [and August 15] of
4-28 each year the amount appropriated to each county, as calculated for each
4-29 operation from the final statement made in February of that year for the
4-30 preceding calendar year . [and the statements filed pursuant to NRS
4-31 362.145.] The state controller shall distribute all money due to a county on
4-32 or before [March 5,] May 30 [and August 20] of each year.
4-33 2. The county treasurer shall apportion to each local government or
4-34 other local entity an amount calculated by:
4-35 (a) Determining the total of the amounts obtained by multiplying, for
4-36 each extractive operation situated within its jurisdiction, the net proceeds
4-37 of that operation and any royalty payments paid by that operation, by the
4-38 rate levied on behalf of that local government or other local entity;
4-39 (b) Adding to the amount determined pursuant to paragraph (a) a pro
4-40 rata share of any penalties and interest collected by the department for the
4-41 late payment of taxes distributed to that local government or local entity;
4-42 and
4-43 (c) Subtracting from the amount determined pursuant to paragraph (b) a
4-44 [percentage] commission of 3 percent of that amount which must be
4-45 deposited in the county general fund.
4-46 3. The amounts apportioned pursuant to subsection 2, including,
4-47 without limitation, the amount retained by the county and excluding the
4-48 percentage commission, must be applied to the uses for which each levy
5-1 was authorized in the same proportion as the rate of each levy bears to the
5-2 total rate.
5-3 4. The department shall report to the state controller on or before May
5-4 25 of each year the amount received as tax upon the net proceeds of
5-5 geothermal resources which equals the product of those net proceeds
5-6 multiplied by the rate of tax levied ad valorem by the State of Nevada.
5-7 Sec. 5. NRS 362.115 and 362.145 are hereby repealed.
5-8 Sec. 6. This act becomes effective upon passage and approval.
5-9 TEXT OF REPEALED SECTION
5-10 362.115 Annual statement of estimated gross yield, net proceeds
5-11 and royalties; use of statement.
5-12 1. In addition to the statement required by subsection 1 of NRS
5-13 362.110, each person extracting any mineral in this state shall, on or
5-14 before April 1 of each year, file with the department a statement showing
5-15 the estimated gross yield and estimated net proceeds from each such
5-16 operation for the entire current calendar year and an estimate of all
5-17 royalties that will be paid during the current calendar year.
5-18 2. The department shall:
5-19 (a) Use the statement filed pursuant to subsection 1 only to prepare
5-20 estimates for use by local governments in the preparation of their budgets;
5-21 and
5-22 (b) Submit those estimates to the local governments on or before April
5-23 25 of each year.
5-24 362.145 Tax on net proceeds and royalties of certain
5-25 geographically separate extractive operations: Due date of payment;
5-26 rate; copy of calculations required; notice of applicability.
5-27 1. If the net proceeds of a geographically separate extractive operation
5-28 in any calendar year exceed $4,000,000, the tax upon the net proceeds for
5-29 the next calendar year must be paid:
5-30 (a) On or before August 1 for one-half of the net proceeds extracted
5-31 from January 1 through June 30 of that year; and
5-32 (b) On or before February 16 for the remaining one-half of the net
5-33 proceeds extracted from January 1 through June 30 and for the net
5-34 proceeds
extracted from July 1 through December 31 of the preceding
year.
5-35 The rate of tax must be computed pursuant to NRS 362.140 on the basis of
5-36 the best estimate of the taxpayer as to the rate that will be applicable for
5-37 the current year. If the rate selected is different than the rate paid in the
5-38 previous year, the taxpayer shall submit a brief explanation with the
5-39 payment to justify the rate selected. If, upon investigation of the facts, the
5-40 department determines that an inappropriate rate was used which resulted
5-41 in an underpayment of the taxes due, the department shall immediately
5-42 notify the taxpayer in writing of the deficiency. The taxpayer shall pay the
5-43 deficiency within 10 days after receipt of such a notice.
6-1 2. If the total amount of royalties paid by a geographically separate
6-2 operation to a person in any calendar year exceeds $100,000, the recipient
6-3 of the royalties shall pay the tax on the royalties for the next calendar year:
6-4 (a) On or before August 1 for royalties paid from January 1 through
6-5 June 30 of that year; and
6-6 (b) On or before February 16 for royalties paid from July 1 through
6-7 December 31 of the preceding year.
6-8 3. The tax upon the net proceeds for any other operation or on any
6-9 other
royalties may be paid pursuant to the requirements of subsection 1
or 2.
6-10 4. The taxpayer shall include with each payment made pursuant to this
6-11 section a copy of the calculations by which the amount of the payment was
6-12 determined, including, without limitation, the amount of net proceeds and
6-13 the rate of tax.
6-14 5. On or before April 15 of each year, the department shall provide a
6-15 notice to each person to whom subsection 1 or 2 applies. The notice must
6-16 include a copy of this section and state that the department has determined
6-17 that subsection 1 or 2 applies to that person for the current calendar year.
6-18 Failure to receive the notice required by this subsection does not excuse
6-19 late payment or nonpayment.
6-20 H