Issues Beyond Oil Taxes Alaska's Legislature Should Debate
Posted 1.18.12 by Renewable Resources Coalition
A brief article discussing the current mining taxation laws in Alaska and another reason why mining in Bristol Bay is a bad idea.
Alaska's getting rich from oil taxes, but is the state getting hosed when it comes to mining? Mining taxes, after all, haven't been raised in 57 years.
And it's a great time to be an Alaska miner. Gold prices have skyrocketed. Massive gold projects are on the horizon, including the controversial Pebble Mine near Bristol Bay's headwaters in Southwest Alaska, and Donlin Creek, along the Kuskokwim River.
Gov. Sean Parnell is also aggressively promoting Alaska's rare earth elements and foresees the 49th state as a center for global REE production.
But at today's tax rates, Alaska will get a miniscule return for those resources.
Miners are exempt from a mining license tax during the first three-and-a-half years of production (except for sand and gravel operations). After that, the state mining tax ranges from 0 to 7 percent of net profit. As for royalties, those are 3 percent and based on net profit -- not the value of the mineral after it's been refined.
Oil companies surely must envy the mining industry. Oil taxes have been revised numerous times since statehood. And oil production taxes rise with global oil prices. Led largely by that tax, oil companies paid $7 billion in unrestricted taxes and royalties in fiscal year 2011.
Mining, on the other hand, paid $140 million, up from 2010 but still a paltry amount. Should mining taxes be raised? Maybe, maybe not. But it's something the Legislature should, at least, be talking about.
-- Alex DeMarban
http://www.alaskadispatch.com/article/what-other-issues-should-alaska-legislature-consider-beyond-oil-taxes?page=full