2005 Nevada Revised Statutes - Chapter 362 — Taxes on Patented Mines and Proceeds of Minerals
CHAPTER 362 - TAXES ON PATENTED MINES ANDPROCEEDS OF MINERALS
GENERAL PROVISIONS
NRS 362.010 Definitions.
ASSESSMENT OF PATENTED MINES AND MINING CLAIMS
NRS 362.030 Countyassessor to assess surface of patented mines and mining claims; exceptions.
NRS 362.040 Exclusionof assessment from roll.
NRS 362.050 Affidavitof labor: Requirement for exemption of surface of patented mine or mining claimfrom taxation; form and contents.
NRS 362.060 Whomay make affidavit.
NRS 362.070 Contiguouspatented mines or mining claims: Performance of work on one mine.
NRS 362.090 Oneaffidavit may be recorded for labor on several patented mines or mining claims.
NRS 362.095 Methodof taxation of patented mine or mining claim used for purpose other than miningor agriculture.
ASSESSMENT AND TAXATION OF NET PROCEEDS OF MINERALS
NRS 362.100 Dutiesof Department.
NRS 362.105 Royaltydefined.
NRS 362.110 Annualstatement of gross yield and claimed net proceeds; annual list of lessees.
NRS 362.115 Annualstatement of estimated gross yield, net proceeds and royalties; use ofstatement.
NRS 362.120 Computationof gross yield and net proceeds.
NRS 362.130 Preparationand mailing of certificate of amount of net proceeds and tax due; due date oftax; overpayments.
NRS 362.135 Appealof certification to State Board of Equalization; payment of tax pendingdetermination of appeal.
NRS 362.140 Rateof tax upon net proceeds.
NRS 362.150 Liensfor taxes on proceeds of minerals.
NRS 362.160 Whentax becomes delinquent; collection of delinquency, penalty and interest; appealof imposition of penalty and interest.
NRS 362.170 Appropriationto county of amount of tax, penalties and interest attributable to extractiveoperations in county; apportionment by county treasurer; Department to reportamount received as tax upon net proceeds of geothermal resources. [Effectivethrough June 30, 2007.]
NRS 362.170 Appropriationto county of amount of tax, penalties and interest attributable to extractiveoperations in county; apportionment by county treasurer; Department to reportamount received as tax upon net proceeds of geothermal resources. [EffectiveJuly 1, 2007.]
NRS 362.171 Establishmentand use of county fund for mitigation and school district fund for mitigation.
NRS 362.175 Procedurefor removal of amount of tax and name from records of Department when taximpossible or impractical to collect.
NRS 362.180 Burdenof proof on taxpayer to show certification by Department to be unjust, improperor invalid.
NRS 362.200 Powersof Department: Examination of records; hearings.
NRS 362.230 Penaltyfor failure to file statements.
NRS 362.240 Penaltyfor false statements.
_________
GENERAL PROVISIONS
NRS
1. Mine means an excavation in the earth from whichores, coal or other mineral substances are extracted, or a subterranean naturaldeposit of minerals located and identified as such by the staking of a claim orother method recognized by law. The term includes a well drilled to extractminerals.
2. Mineral includes oil, gas and other hydrocarbons,but does not include sand, gravel or water, except hot water or steam in anoperation extracting geothermal resources for profit.
3. Patented mine or mining claim means eachseparate, whole or fractional patented mining location, whether such whole orfractional mining location is covered by an independent patent or is includedunder a single patent with other mining locations.
[1:206:1915; 1919 RL p. 3009; NCL 6592](NRS A1975, 317; 1989, 33)
ASSESSMENT OF PATENTED MINES AND MINING CLAIMS
NRS
[3:206:1915; 1919 RL p. 3009; NCL 6594](NRS A1989, 33)
NRS
[4:206:1915; A 1933, 233; 1931 NCL 6595](NRS A1989, 33, 1831; 1991, 2105;
NRS
1. To obtain the exemption of the surface of apatented mine or mining claim from taxation ad valorem, pursuant to Section 5of Article 10 of the Constitution of this state, the owner must record anaffidavit with the office of the county recorder for the county in which themine is located on or before December 30 covering work done during the 12months next preceding 12 a.m. on September 1 of that year. The exemption thenapplies to the taxes for the fiscal year beginning on July 1 following thefiling of the affidavit. Upon receipt of such an affidavit, the county recordershall transmit a copy of the affidavit, without charge, to the county assessor.
2. The affidavit of labor must describe particularlythe work performed, upon what portion of the mine or claim, and when and bywhom done, and may be substantially in the following form:
State of Nevada }
}ss.
County of................................... }
................................, being first dulysworn, deposes and says: That development work worth at least $100 wasperformed upon the ............................... patented mine or miningclaim, situated in the ........................................ MiningDistrict, County of ..........................................., State ofNevada, during the federal mining assessment work period ending within the year....... . The work was done at the expense of ..............................,the owner (or one of the owners) of the patented mine or mining claim, for thepurpose of relieving it from the tax assessment. It was performed by................................, at about ................ feet in a................ direction from the monument of location, and was done betweenthe ........ day of the month of ........ of the year ......., and the.......... day of the month of .......... of the year ......., and consisted ofthe following work:
.......................................................................................................................................................
.......................................................................................................................................................
...............................................................
(Signature)
Subscribed and sworn to before me
this ...... day of the month of ...... of the year ......
...............................................................................
Notary Public (or other person
authorized to administer oaths)
[7:206:1915; A 1933, 233; 1931 NCL 6598](NRS A1975, 317; 1985, 1221, 1503; 1989, 33; 1991, 2105;
NRS
[8:206:1915; 1919 RL p. 3010; NCL 6599]
NRS
[9:206:1915; 1919 RL p. 3010; NCL 6600](NRS A1989, 34)
NRS
[11:206:1915; 1919 RL p. 3011; NCL 6602](NRS A1989, 34, 1832)
NRS
1. Whenever any portion of a patented mine or miningclaim is used by the patentee or a successor in interest for a purposeunrelated to mining or agriculture, the portion of such patented mine or miningclaim so used shall cease to be a patented mine or mining claim or part thereofand shall be taxed as other real property is taxed.
2. For the purpose of this section, a dwelling placedupon a patented mine or mining claim to be occupied by the operator of suchpatented mine or mining claim or his agent is not a use unrelated to mining.
3. Whenever any patented mine or mining claim is taxedas real property, such taxation shall not affect the status of contiguouspatented mines or mining claims.
(Added to NRS by 1967, 839; A 1989, 34)
ASSESSMENT AND TAXATION OF NET PROCEEDS OF MINERALS
NRS
1. The Department shall:
(a) Investigate and determine the net proceeds of allminerals extracted and certify them as provided in
(b) Appraise and assess all reduction, smelting andmilling works, plants and facilities, whether or not associated with a mine,all drilling rigs, and all supplies, machinery, equipment, apparatus,facilities, buildings, structures and other improvements used in connectionwith any mining, drilling, reduction, smelting or milling operation as providedin chapter 361 of NRS.
2. As used in this section, net proceeds of allminerals extracted includes the proceeds of all:
(a) Operating mines;
(b) Operating oil and gas wells;
(c) Operations extracting geothermal resources forprofit, except an operation which uses natural hot water to enhance the growthof animal or plant life; and
(d) Operations extracting minerals from naturalsolutions.
[Part 13:177:1917; 1919 RL p. 3202; NCL 6554] +[1:77:1927; NCL 6578](NRS A 1975, 1675; 1983, 2088; 1985, 1305; 1989, 34)
NRS
1. Royalty means a portion of the proceeds fromextraction of a mineral which is paid for the privilege of extracting themineral.
2. Royalties do not include:
(a) Rents or other compensatory payments which arefixed and certain in amount and payable periodically over the duration of thelease regardless of the extent of extractions; or
(b) Minimum royalties covering periods when no mineralis extracted if the payments are fixed and certain in amount and payable on aregular periodic basis.
(Added to NRS by 1975, 135; A 1989, 35)
NRS
1. Every person extracting any mineral in this Stateor receiving any royalty:
(a) Shall, on or before February 16 of each year, filewith the Department a statement showing the gross yield and claimed netproceeds from each geographically separate operation where a mineral isextracted by that person during the calendar year immediately preceding theyear in which the statement is filed.
(b) May have up to 30 days after filing the statementrequired by paragraph (a) to file an amended statement.
2. The statement must:
(a) Show the claimed deductions from the gross yield inthe detail set forth in NRS 362.120. Thedeductions are limited to the costs incurred during the calendar yearimmediately preceding the year in which the statement is filed.
(b) Be in the form prescribed by the Department.
(c) Be verified by the manager, superintendent,secretary or treasurer of the corporation, or by the owner of the operation,or, if the owner is a natural person, by someone authorized in his behalf.
3. Each recipient of a royalty as described insubsection 1 shall annually file with the Department a list showing each of thelessees responsible for taxes due in connection with the operation oroperations included in the statement filed pursuant to subsections 1 and 2.
[2:77:1927; A 1929, 120; NCL 6579](NRS A 1971,562; 1973, 1293; 1975, 1675; 1979, 819; 1983, 878; 1989, 35; 1995, 40;
NRS
1. In addition to the statement required by subsection1 of NRS 362.110, each person extractingany mineral in this State shall, on or before March 1 of each year, file withthe Department a statement showing the estimated gross yield and estimated netproceeds from each such operation for the entire current calendar year and anestimate of all royalties that will be paid during the current calendar year.
2. The Department shall:
(a) Use the statement filed pursuant to subsection 1only to prepare estimates for use by local governments in the preparation oftheir budgets; and
(b) Submit those estimates to the local governments onor before March 15 of each year.
(Added to NRS by 1987, 2141; A 1989, 36, 1536; 1993,1360; 1995, 40; 1999,733; 2005, 308)
NRS
1. The Department shall, from the statement filedpursuant to NRS 362.110 and from allobtainable data, evidence and reports, compute in dollars and cents the grossyield and net proceeds of the calendar year immediately preceding the year inwhich the statement is filed.
2. The gross yield must include the value of anymineral extracted which was:
(a) Sold;
(b) Exchanged for any thing or service;
(c) Removed from the State in a form ready for use orsale; or
(d) Used in a manufacturing process or in providing aservice,
during thatperiod.
3. The net proceeds are ascertained and determined bysubtracting from the gross yield the following deductions for costs incurredduring that period, and none other:
(a) The actual cost of extracting the mineral.
(b) The actual cost of transporting the mineral to theplace or places of reduction, refining and sale.
(c) The actual cost of reduction, refining and sale.
(d) The actual cost of marketing and delivering themineral and the conversion of the mineral into money.
(e) The actual cost of maintenance and repairs of:
(1) All machinery, equipment, apparatus andfacilities used in the mine.
(2) All milling, refining, smelting andreduction works, plants and facilities.
(3) All facilities and equipment fortransportation except those that are under the jurisdiction of the PublicUtilities Commission of Nevada or the Transportation Services Authority.
(f) The actual cost of fire insurance on the machinery,equipment, apparatus, works, plants and facilities mentioned in paragraph (e).
(g) Depreciation of the original capitalized cost ofthe machinery, equipment, apparatus, works, plants and facilities mentioned inparagraph (e). The annual depreciation charge consists of amortization of theoriginal cost in a manner prescribed by regulation of the Nevada TaxCommission. The probable life of the property represented by the original costmust be considered in computing the depreciation charge.
(h) All money expended for premiums for industrialinsurance, and the actual cost of hospital and medical attention and accidentbenefits and group insurance for all employees.
(i) All money paid as contributions or payments underthe unemployment compensation law of the State of Nevada, as contained in
(j) The actual cost of developmental work in or aboutthe mine or upon a group of mines when operated as a unit.
(k) All money paid as royalties by a lessee orsublessee of a mine or well, or by both, in determining the net proceeds of thelessee or sublessee, or both.
4. Royalties deducted by a lessee or sublesseeconstitute part of the net proceeds of the minerals extracted, upon which a taxmust be levied against the person to whom the royalty has been paid.
5. Every person acquiring property in the State ofNevada to engage in the extraction of minerals and who incurs any of theexpenses mentioned in subsection 3 shall report those expenses and therecipient of any royalty to the Department on forms provided by the Department.
6. The several deductions mentioned in subsection 3 donot include any expenditures for salaries, or any portion of salaries, of anyperson not actually engaged in:
(a) The working of the mine;
(b) The operating of the mill, smelter or reductionworks;
(c) The operating of the facilities or equipment fortransportation;
(d) Superintending the management of any of thoseoperations; or
(e) The State of Nevada, in office, clerical orengineering work necessary or proper in connection with any of thoseoperations.
[3:77:1927; A 1937, 139; 1939, 256; 1931 NCL 6580](NRS A 1971, 926; 1973, 1294; 1975, 1676; 1979, 820; 1983, 254; 1989, 36,1533; 1991, 146; 1997, 1990;
NRS
1. When the Department determines from the annualstatement filed pursuant to NRS 362.110the net proceeds of any minerals extracted, it shall prepare its certificate ofthe amount of the net proceeds and the tax due and shall send a copy to theowner of the mine, operator of the mine or recipient of the royalty, as thecase may be.
2. The certificate must be prepared and mailed notlater than:
(a) April 20 immediately following the month ofFebruary during which the statement was filed; or
(b) April 30 immediately thereafter if an amendedstatement is filed in a timely manner.
3. The tax due as indicated in the certificateprepared pursuant to this section must be paid on or before May 10 of the yearin which the certificate is received.
4. If an overpayment was made, the overpayment may becredited toward the payment due on May 10 of the next calendar year. If thecertificate prepared pursuant to this section shows a net loss for the yearcovered by the certificate or an amount of tax due for that year which is lessthan an overpayment made for the preceding year, the amount or remaining amountof the overpayment must be refunded to the taxpayer within 30 days after thecertification was sent to the taxpayer.
[4:77:1927; NCL 6581](NRS A 1969, 561; 1973, 1295;1975, 1677; 1979, 822; 1981, 809; 1987, 168, 2141; 1989, 38, 1537; 1991, 653;1993, 1361; 1995, 41; 1999,733; 2001, 663;2005, 297)
NRS
1. Any person dissatisfied by any certification of theDepartment may appeal from that determination to the State Board ofEqualization. The appeal must be filed within 30 days after the certificationis sent to the taxpayer.
2. Pending determination of the appeal, the personcertified as owing the tax shall pay it on or before the date due, and the taxis considered to be paid under protest.
(Added to NRS by 1977, 1052; A 1987, 169; 1989, 38)
NRS
1. Except as otherwise provided in this section, therate of tax upon the net proceeds of each geographically separate extractiveoperation depends upon the ratio of the net proceeds to the gross proceeds ofthat operation as a whole, according to the following table:
Net Proceeds as Percentage Rateof Tax as Percentage
of Gross Proceeds ofNet Proceeds
Less than 10............................................................................................. 2.00
10 or more but less than 18.................................................................... 2.50
18 or more but less than 26.................................................................... 3.00
26 or more but less than 34.................................................................... 3.50
34 or more but less than 42.................................................................... 4.00
42 or more but less than 50.................................................................... 4.50
50 or more................................................................................................. 5.00
2. If the combined rate of tax ad valorem which wouldbe assessed but for the provisions of Section 5 of Article 10 of theConstitution of this state, including any rate levied by the State of Nevada,upon property at the situs of the operation is more than 2 percent, the minimumrate of tax under this section equals that rate of tax ad valorem.
3. The rate of tax upon royalties is 5 percent.
4. The rate of tax upon the net proceeds of ageothermal operation taxable pursuant to NRS362.100 is the combined rate of tax ad valorem applicable to the propertyat the situs of the operation.
5. The rate of tax upon an operation for which the netproceeds in a calendar year exceed $4,000,000 is 5 percent.
[Part 75:99:1891; C 1147; RL 3687; NCL 6481](NRS A 1989, 38, 1537)
NRS
[76:99:1891; C 1148; RL 3688; NCL 6482](NRS A1979, 822; 1989, 39)
NRS
1. Except as otherwise provided in
2. Any person extracting any mineral or receiving aroyalty may appeal from the imposition of the penalty and interest to theNevada Tax Commission by filing a notice of appeal in accordance with therequirements set forth in NRS 360.245.
[5:77:1927; NCL 6582](NRS A 1975, 1678; 1987, 169;1989, 39; 1995, 42; 1999,2490)
NRS
1. There is hereby appropriated to each county thetotal of the amounts obtained by multiplying, for each extractive operationsituated within the county, the net proceeds of that operation and anyroyalties paid by that operation, by the combined rate of tax ad valorem,excluding any rate levied by the State of Nevada, for property at that site,plus a pro rata share of any penalties and interest collected by the Departmentfor the late payment of taxes distributed to the county. The Department shallreport to the State Controller on or before May 25 of each year the amountappropriated to each county, as calculated for each operation from the finalstatement made in February of that year for the preceding calendar year. TheState Controller shall distribute all money due to a county on or before May 30of each year.
2. The county treasurer shall apportion to each localgovernment or other local entity an amount calculated by:
(a) Determining the total of the amounts obtained bymultiplying, for each extractive operation situated within its jurisdiction,the net proceeds of that operation and any royalty payments paid by thatoperation, by the rate levied on behalf of that local government or other localentity;
(b) Adding to the amount determined pursuant toparagraph (a) a pro rata share of any penalties and interest collected by theDepartment for the late payment of taxes distributed to that local governmentor local entity; and
(c) Subtracting from the amount determined pursuant toparagraph (b) a commission of 5 percent of that amount, of which 3 percent mustbe deposited in the county general fund and 2 percent must be accounted forseparately in the account for the acquisition and improvement of technology inthe office of the county assessor created pursuant to
3. The amounts apportioned pursuant to subsection 2,including, without limitation, the amount retained by the county and excludingthe percentage commission, must be applied to the uses for which each levy wasauthorized in the same proportion as the rate of each levy bears to the totalrate.
4. The Department shall report to the State Controlleron or before May 25 of each year the amount received as tax upon the netproceeds of geothermal resources which equals the product of those net proceedsmultiplied by the rate of tax levied ad valorem by the State of Nevada.
[Part 1:57:1885; BH 2386; C 1241; RL 1581; NCL 2062](NRS A 1959, 761; 1989, 39, 1538; 1995, 42;
NRS 362.170
1. There is hereby appropriated to each county thetotal of the amounts obtained by multiplying, for each extractive operationsituated within the county, the net proceeds of that operation and anyroyalties paid by that operation, by the combined rate of tax ad valorem,excluding any rate levied by the State of Nevada, for property at that site,plus a pro rata share of any penalties and interest collected by the Departmentfor the late payment of taxes distributed to the county. The Department shallreport to the State Controller on or before May 25 of each year the amountappropriated to each county, as calculated for each operation from the finalstatement made in February of that year for the preceding calendar year. TheState Controller shall distribute all money due to a county on or before May 30of each year.
2. The county treasurer shall apportion to each localgovernment or other local entity an amount calculated by:
(a) Determining the total of the amounts obtained bymultiplying, for each extractive operation situated within its jurisdiction,the net proceeds of that operation and any royalty payments paid by thatoperation, by the rate levied on behalf of that local government or other localentity;
(b) Adding to the amount determined pursuant toparagraph (a) a pro rata share of any penalties and interest collected by theDepartment for the late payment of taxes distributed to that local governmentor local entity; and
(c) Subtracting from the amount determined pursuant toparagraph (b) a commission of 3 percent of that amount which must be depositedin the county general fund.
3. The amounts apportioned pursuant to subsection 2,including, without limitation, the amount retained by the county and excludingthe percentage commission, must be applied to the uses for which each levy wasauthorized in the same proportion as the rate of each levy bears to the totalrate.
4. The Department shall report to the State Controlleron or before May 25 of each year the amount received as tax upon the netproceeds of geothermal resources which equals the product of those net proceedsmultiplied by the rate of tax levied ad valorem by the State of Nevada.
[Part 1:57:1885; BH 2386; C 1241; RL 1581; NCL 2062](NRS A 1959, 761; 1989, 39, 1538; 1995, 42;
NRS
1. Each county to which money is appropriated bysubsection 1 of NRS 362.170 may setaside a percentage of that appropriation to establish a county fund formitigation. Money from the fund may be appropriated by the board of countycommissioners only to mitigate adverse effects upon the county, or the schooldistrict located in the county, which result from:
(a) A decline in the revenue received by the countyfrom the tax on the net proceeds of minerals during the 2 fiscal yearsimmediately preceding the current fiscal year; or
(b) The opening or closing of an extractive operationfrom the net proceeds of which revenue has been or is reasonably expected to bederived pursuant to this chapter.
2. Each school district to which money is apportionedby a county pursuant to subsection 2 of NRS362.170 may set aside a percentage of the amount apportioned to establish aschool district fund for mitigation. Money from the fund may be used by theschool district only to mitigate adverse effects upon the school district whichresult from:
(a) A decline in the revenue received by the schooldistrict from the tax on the net proceeds of minerals during the 2 fiscal yearsimmediately preceding the current fiscal year; or
(b) The opening or closing of an extractive operationfrom the net proceeds of which revenue has been or is reasonably expected to bederived pursuant to this chapter.
(Added to NRS by 1993, 2289; A
NRS
1. If at any time, in the opinion of the ExecutiveDirector, it becomes impossible or impractical to collect any tax certified onthe proceeds of minerals extracted, the Executive Director may apply to theNevada Tax Commission to have the amount of the tax and the name of the personagainst whom the tax is certified removed from the tax records of theDepartment.
2. If the Nevada Tax Commission approves theapplication, the Department may remove the name and amount from its taxrecords.
(Added to NRS by 1960, 84; A 1975, 1678; 1989, 40)
NRS
[Part 13:177:1917; 1919 RL p. 3202; NCL 6554] +[6:77:1927; NCL 6583](NRS A 1975, 1678; 1977, 1052; 1989, 40)
NRS
1. The Department may examine the records of anyperson operating or receiving royalties from any extractive operation in thisstate. The records are subject to examination at all times by the Department orits authorized agents and must remain available for examination for a period of4 years from the date of any entry therein.
2. If any person whose gross yield from an extractiveoperation as reported to the Department for any annual reporting period duringthe 4 years immediately preceding the examination was $100,000 or more keepshis books and records pertaining to that operation or royalties outside thisstate, the person shall pay an amount per day equal to the amount set by lawfor out-of-state travel for each day or fraction thereof during which anexaminer is actually engaged in examining the books, plus the actual expensesof that examiner during the time he is absent from Carson City, Nevada, for thepurpose of making the examination, but the time must not exceed 1 day going toand 1 day coming from the place of examination. No more than one examinationmay be charged against a person in any 1 fiscal year.
3. The Department may hold hearings and summon andsubpoena witnesses to appear and testify upon any subject material to thedetermination of the net proceeds of minerals extracted. The hearings may beheld at any place the Department designates, after not less than 10 daysnotice of the time and place of the hearing given in writing to the owner oroperator of the mine. The owner or operator is entitled, on request made to theExecutive Director, to the issuance of the Departments subpoena requiringwitnesses in behalf of the owner or operator to appear and testify at suchhearing.
4. The failure of a witness to obey the subpoena ofthe Department subjects the witness to the same penalties prescribed by law forfailure to obey a subpoena of a district court.
[9:77:1927; NCL 6586](NRS A 1975, 318, 1679; 1977,1052; 1985, 1438; 1989, 40)
NRS
1. Every person extracting any mineral in this state,or receiving a royalty in connection therewith, who fails to file with theDepartment the statements provided for in NRS362.100 to 362.240, inclusive,during the time and in the manner provided for in
2. The Executive Director shall determine the amountof the penalty. This penalty becomes a debt due the State of Nevada and, uponcollection, must be deposited in the State Treasury to the credit of the StateGeneral Fund.
3. Any person extracting any mineral or receiving aroyalty may appeal from the imposition of the penalty to the Nevada TaxCommission by filing a notice of appeal in accordance with the requirements setforth in NRS 360.245.
[7:77:1927; NCL 6584](NRS A 1971, 563; 1973, 1296;1975, 135, 1679; 1989, 41; 1995, 43;
NRS
[8:77:1927; NCL 6585](NRS A 1975, 1680)
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