Mine Taxation

BACKGROUND:  Idaho's constitution requires the state to balance its annual budget.  Historically the state has accomplished this with taxes on individual and corporate income and on the sale of goods.  Local governments and schools generally rely on local property taxes to fund their operations.

The mining industry is subject to all of these taxes.  While the industry is exempt from paying sales taxes on production equipment, other equipment and goods used by the industry are subject to sales tax.  Profitable enterprises must pay income taxes.  Land, buildings and equipment are all subject to local property taxes.  The value of a mineral ore body for local property tax purposes is determined under state law through the valuation of net profits.  In addition to all of these taxes, the mining industry pays a mine license tax based on the net value of the minerals produced each year.

POLICY:  The Idaho Mining Association supports:

• A fair, balanced and stable state tax system designed to raise sufficient revenue to fund essential government programs and services;
• State and local tax systems that encourage investment and economic growth;
• An exemption from sales tax for production equipment; and
• Limited growth in state government programs and services to levels consistent with the growth in population and adjusted for inflation.

Specifically, the Idaho Mining Association supports:

• Elimination of the property tax on personal property such as equipment and
        machinery;
• Tax credits for new capital investment;
• Tax credits for the creation of new jobs;

The Idaho Mining Association opposes:

• Local option sales or income taxes;
• Increases in the state sales tax rate;
• Expansion of the sales tax to services;
• Any increase in the mine license tax;
• Any increase in the corporate income tax;
• Elimination of the investment tax credit;
• Elimination of the production exemption.