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people online in the last 1 minutes - 0 members, 0 anon and 0 guests. (Most ever was 29 at 13:36:32 Sat Aug 3 2002)

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Spek
21:48:19 Thu
Jul 23 2009

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Alaska Mining claim production royalty

This is a boring, semi-technical question that has been bugging me for a while. If you don't like boring,
semi-technical questions please skip.
In the course of researching another issue I googled up Alaska Statute 38.05.212 which is the statute that establishes the authority for levying a production fee for mining in Alaska. It also authorizes the commisioner to "adopt regulations to implement this section". AS 38.05.212 appears to address only
mining claims, leasehold locations and mining leases. DNR's "Fact Sheet" on production royalty
specifically specifies this royalty is required of holders of STATE mining locations.
Sometimes in making laws the legislators are vague
to the point of negligence in explaining their meaning.
Whether this production tax applies only to State mining locations or not would require a research of
the records in juneau to clarify the "intent" of the lawmakers in adopting AS 38.05.212. If the intent was
that it only apply to State of Alaska mining locations
then somewhere it seems the commissioner went astray and is applying it also to Federal mining claims
as well as private property.
It seems reasonable to suspect that the original intent was to provide a revenue to the state from the use or developement of state public resources and was not originally intended to apply to patented claims
or private land. I know not how to research the records to determine the original intent. Is there anyone one on this board that knows how?

  
Spek
07:18:37 Sat
Jul 25 2009

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Re: Alaska Mining claim production royalty

Thanks for the reply wizard. Just seems to be some conflict there between the DNR fact sheet which states
that those with "state" mining locations are the ones required to pay the royalty (which implies that the requirement only applies to "state" location holders and would exclude holdings on federal or private lands) and what the Dept of revenue is doing in levying the tax on "all" mining locations including federal and private lands. Seems like some confusion regarding the intent of AS 38.05.212
between what DNR thinks the intent was and what
the Dept of Revenue thinks it was. At any rate the
administration of this royalty is a horrid mess. I
seriously doubt that the income from this it even begins to compensate for the cost to the taxpayers of
handling the paper work. In which case the royalty becomes a liability to the public rather than an asset.
Is that twisted or what?

  
Spek
19:16:32 Sat
Jul 25 2009

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Re: Alaska Mining claim production royalty

Wow, thats a far greater figure than I would have ever imagined it would be. The big mines must be paying some huge royalties. (Kinda strange they call it a mining "license" tax instead of a mining production
tax.)
For the last two years the Dept of revenue has made me get a mining license and file a mining license
tax return for production on private property.

  
Spek
02:09:23 Sun
Jul 26 2009

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Re: Alaska Mining claim production royalty

Thanks , guess I'll have to do some research or just keep struggling through the red tape. Probably the latter. Hate these rainy days, to much time to think and stew , LOL.

  
chickengold
03:56:59 Wed
Oct 28 2009

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Re: Alaska Mining claim production royalty

Just dug this thread up an am curious.

Spek, you say that the Dept of Revenue is applying the production to ALL mining claims and private land. Where are you deriving that information? As you said, 38.05.212 requires holders of state mining locations to pay a production royalty on all revenues received from minerals produced on state land. That's seems pretty clear cut. And the Dept of Revenue's website (http://www.commerce.state.ak.us/oed/minerals/pub/AKTaxInfo2008.pdf) state's: " The State sets a
production royalty of 3% on net income
from product (except coal) sales from State
lands only
." (Emphasis added)

Geowizard, I think you are mistaken about the State of Alaska not having mining tax jurisdiction over private and patented lands. The Alaska Mining License Tax (a separate tax from the royalty tax) is paid by all licensed mining operations in the state regardless of land ownership and is levied on the net income from those activities. Tax rates are based on a graduated scale that increases with net income. Again, from the Dept of Revenue's website: "The Mining License
Tax is assessed on net income from mineral
product sales from all lands within the State." (Emphasis added)
All mining operations within the State are required to obtain a mining license and file an APMA (and bond if over 5 acres of disturbance) regardless of land ownership.

If I am wrong, please show me where it says otherwise.





---
Mike
Chicken Gold Camp
 
 
chickenminer
19:24:06 Wed
Oct 28 2009

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Re: Alaska Mining claim production royalty

Mike,
You're correct on the Alaska Mining License Tax. All licensed operations in Alaska must file the form and pay the tax (if due).
The DNR website even lists examples of patented claim holders having to file.

Operators on Federal claims are not required to file an APMA. They may choose to do so.
Where the State gets us is, if we want to use the State Bonding Pool then we must file an APMA.



---
Dick Hammond - Chicken, Alaska
Chicken / Stonehouse Creek Mining
Chickenminer.com
 
 
Geo_Jim
02:49:19 Mon
Nov 2 2009

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Re: Alaska Mining claim production royalty

Chickengold is right. There are two seperate state taxes on mining. A royalty tax on state lands which does not apply to non-state land miners. Also we have a mining license tax that snares all miners in Alaska after 3.5 yeras of production.

It is not more complicated than that.
Geo Jim

  

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