AG exempts UNR mines school from mining tax

The Nevada Attorney General’s Office has issued an opinion exempting the University of Nevada, Reno School of Mines from having to pay the net proceeds of the mines tax.

The issue was raised because the school receives royalties from mining operations and, generally, recipients of royalties are required to report to the Department of Taxation to calculate the amount of tax due on those royalties.

The opinion by Deputy AG Brandee Mooneyhan says the short answer is the statute requires taxing the recipient of such royalties only if the recipient is a person.

“Since the university is not a person under Nevada law, the university is not required to report or pay Nevada’s tax on the net proceeds of minerals,” the opinion states.

The mine in question is a property in Humboldt County that’s owned by the university but operated by the Marigold Mining Company under contract since 1988. Until 2017, the mining company paid the tax on the royalties it was paying the university. But in 2017, Marigold informed the university amendments to state statute required the university to make the payments directly to the Taxation Department.

At that point, the system asked taxation officials for a ruling and taxation concluded the university wasn’t required to make the payments. University officials then asked for a refund of taxes paid on its behalf and the Tax Commission asked the system to get the Attorney General’s Office opinion on the issue.

In its Dec. 27 opinion, the AG’s office agreed the university is exempt from the tax on royalties.