High court rules mining company can’t have it both ways on tax break
The Nevada Supreme Court ruled Tuesday Meridian Gold Co. can’t have it both ways on a state tax break.
The company won permission to use an accelerated depreciation schedule for its gold-mining operation because it was closing down mining operations at Paradise Peak Mine in 1992. The accelerated depreciation schedule allowed them to save millions over the standard depreciation period of 20 years.
But Meridian continued to produce gold through heap leaching for two years after it said it was closing down. The state Tax Commission then revoked the company’s accelerated-depreciation schedule and assessed Meridian $860,628 in back taxes and penalties for failing to terminate mining operations as promised.
The company sued, arguing it did cease mining operations and that collecting gold by heap-leaching existing stocks of ore isn’t the same.
The district court rejected that argument, and on Tuesday, so did the Supreme Court.
“We conclude that the plain meaning of the phrase ‘mining operation’ includes extracting precious metals from earth,” the opinion states. “Thus, cyanide heap leaching is a mining operation and the district court did not err in affirm the requirement that Meridian pay additional taxes.”
All seven members of the court agreed the Tax Commission was right to impose the added taxes.