Mining Tax Guide
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Mining Tax Guide 2019 2019 Distribution of Production Tax (Based on 2018 Production Year) Total Production Tax — $103,789,847* Production Tax per taxable ton – $2.751. Taxable tonnage – 34,934,314 tons. Property Tax Department of Iron Range Cities and Townships School Districts Counties Resources & Rehabilitation Other Relief and Misc. (IRRR) $12,253,888 $19,746,967 $12,049,363 $12,576,381 $9,420,461 35.1 cpt 56.5 cpt 34.4 cpt $37,742,787 27.0 cpt 36.0 cpt 108.0 cpt City and Township Taconite School Regular Taconite Property IRRR Fund** Taconite Economic Mining & Conc Fund** $0.0343 Fund** County Fund** Tax Relief $3,481,195 Development Fund $1,958,947 $1,450,450 $7,133,755 $12,576,381 10.0 cpt $9,224,587 5.6 cpt 4.1 cpt*** 20.4 cpt 36.0 cpt 26.4 cpt IRRR Fixed Fund Regular School Township Fund $1,252,520 $0.2472 Fund** County Road and $1,174,750 3.6 cpt $9,521,706 Bridge Fund** Range Association 3.4 cpt 27.3 cpt*** $4,131,231 Iron Range Higher of Municipalities & Schools** 11.8 cpt Education Acct. $126,006 Taconite Municipal Aid** Taconite Railroad $1,746,717 0.4 cpt 5.0 cpt $5,997,930 $1,106,935 Taconite 17.2 cpt 3.2 cpt*** Railroad Producer Grant & Loan Fund Hockey $784,377 $3,007,800 Hall of Fame 2.2 cpt Taconite Railroad Building Maintenance Fund 8.6 cpt $69,868 $591,142 $1,397,372 0.2 cpt 1.7 cpt 4.0 cpt Educational Revenue Bonds $3,990,384 Mining Effects** Taconite Referendum** 11.4 cpt $1,692,584 $6,178,596 4.8 cpt 17.7 cpt Iron Range School Cons. & Cooperatively Operated Special City/ School Bond School Account Township Fund Payments $8,377,087 $157,055 $773,388 24.0 cpt 0.4 cpt 2.2 cpt Taconite Environmental Transferred from schools ***($681,480) was subtracted from the Taconite Protection Fund to cities and townships School, Regular School and Tac RR funds and $10,937,237 $681,480 Guarantee Fund transferred to cities/townships within the districts 31.3 cpt 2.0 cpt M.S. 298.225 because it was above levy limitations (2.0 cpt). Douglas J. Johnson Economic M.S. 298.293 Protection Trust Fund * Includes $7,685,549 from the State General Fund (22.0 cpt). $4,949,847 ** Payments to the funds are guaranteed at a percentage level of the base year (1983 or 1999) by 14.1 cpt M.S. 298.225 for local aids and M.S. 298.293 for Property Tax Relief. cpt = cents per taxable ton (cpt totals may not add up due to rounding). Table of Contents 2019 Distribution of Production Tax ........................................................Inside front cover Minerals and Mining Agencies .........................................................................i Overview ..........................................................................................1 Production Tax ......................................................................................3 Occupation Tax ....................................................................................23 Ad Valorem Tax on Auxiliary Mining Lands for Taconite Operations . 27 Ad Valorem Tax on Unmined Taconite ..................................................................28 Ad Valorem Tax on Unmined Natural Iron Ore............................................................29 Ad Valorem Tax on Taconite Railroads ..................................................................31 Ad Valorem Tax on Severed Mineral Interests . 32 Taxes on Nonferrous Minerals.........................................................................34 Glossary of Terms ..................................................................................35 Mine Locations and Production Capacity ................................................................37 Distribution of Mining Taxes....................................................................Last page Data Charts Figure Figure 1 Iron Ore Production Comparison . 1 Occupation Tax 2 Minnesota Taconite Production Summary .............2 15 Employment and Mine Value by Mine ...............24 3 Minnesota Taxes Levied on Mining-Related Activity.....2 16 Occupation Tax by Company ......................25 Production Tax 17 Occupation Tax by Product Type ...................25 4 Distribution by Fund/Recipient .....................12 18 Occupation Tax Averages–Taconite Only .............26 5 2019 Distributions by Fund to Cities and Townships ....13 Ad Valorem Taxes 6 2019 Distributions by Fund to School Districts ........17 19 Ad Valorem Tax on Unmined Taconite ...............28 7 School Bond Payments ...........................18 20 Minimum Valuation Rates on Unmined Natural Iron Ore ................................30 8 2019 Distributions by Fund to Counties ..............18 21 Ad Valorem Tax Payable on Unmined Natural Iron Ore..30 9 2018 Taxable Production and Tax by Mine............19 22 Ad Valorem Tax Assessed on Taconite Railroads .......31 10 2018 Production Tonnage by Product Type............19 23 Ad Valorem Tax on Severed Mineral Interests: 11 Changing Trends in Minnesota Taconite Production ....20 Collection and Distribution ........................32 12 Rate History and Index Summary ...................21 13 Taconite Produced and Production Tax Collected.......21 14 World Direct Reduced Iron Production...............22 Figures are available in Excel format on our website. Go to www.revenue.state.mn.us and type Mining Statistics in the Search Box. Subscribe for email updates To be notified when new mining data is posted on the website, go www.revenue.state.mn.us and typeMining in the Search box. Select Mineral Taxes then select Subscribe to Mining Taxes updates and information. The Minnesota Mining Tax Guide is available on our website at www.revenue.state.mn.us. Minerals and Mining Agencies Minnesota Department of Revenue Minnesota Department of Natural Resources (DNR) 600 North Robert Street, St. Paul, MN 55101 [email protected] 500 Lafayette Road, St. Paul, MN 55155 651-259-5555 Sarah Strommen, Commissioner Fax: 651-259-5022 Cynthia Bauerly, Commissioner 651-556-6003 Gina Amacher, Director, Special Taxes Division 651-556-6781 DNR Lands and Minerals Division 651-259-5959 Steven Helmen, Minerals Taxes Supervisior 651-556-6848 500 Lafayette Road, St. Paul, MN 55155 Fax: 651-296-5939 [email protected] Joseph Henderson, Director Susan Damon, Assistant Director Virginia Office Heather Arends, Mineral Potential 651-259-5376 230 1st Street S., Suite 102, Virginia, MN 55792 218-744-7424 Fax: 218-742-9153 Lands and Minerals Division 218-231-8484 Robert Wagstrom, Production Tax [email protected] 1525 Third Avenue East, Hibbing, MN 55746 Fax: 218-262-7328 Peter Clevenstine, Assistant Director 218-231-8443 Iron Mining Association of Minnesota 324 West Superior Street: Suite 502 218-722-7724 Duluth, MN 55802 Fax: 218-720-6707 Natural Resources Research Institute Toll Free 1-800-234-0054 University of Minnesota, Duluth Kelsey Johnson, President [email protected] 5013 Miller Trunk Highway, Duluth, MN 55811 218-788-2694 Fax: 218-788-2619 Rolf Weberg, Executive Director Minnesota Department of Iron Range Resources & George Hudak, Director, Minerals Division Rehabilitation Larry Zanko, Senior Research Fellow P. O. Box 441 218-735-3000 Coleraine Minerals Research Laboratory 4261 Highway 53 South Toll Free 1-800-765-5043 P.O. Box 188, One Gayley Ave, Coleraine, MN 55722 Eveleth, MN 55734 Fax: 218-735-3047 Richard Kiesel, Director 218-667-4201 Mark Phillips, Commissioner [email protected] Steve Peterson, Exec. Director of Development [email protected] Marianne Bouska, Chief Operating Officer [email protected] Al Becicka, Legal Counsel [email protected] St. Louis County Inspector of Mines Brian Hiti, Senior Policy Advisor – Mining [email protected] 307 South First St, Virginia, MN 55792 218-742-9840 Fax: 218-471-7270 Mining & Mineland Reclamation Steve Manninen , Inspector of Mines 1003 Discovery Drive, Chisholm, MN 55719 218-274-7000 Fax: 218-274-7002 Linda Johnson Mining and Reclamation Program Supervisor [email protected] i Overview The Minnesota Mining Tax Guide is published to identify all State Taxes Incidental to Mining Minnesota mining-related taxes paid by the mining industry. Other state taxes impacted by mining include Sales and Use Tax and withholding on royalties. Go to revenue.state.mn.us and type Production Tax Mining in the Search box. Follow the links to Sales Tax Fact The Production Tax is the largest tax paid by the ferrous Sheet 147 (Taconite and Iron Mining) or Withholding on Mining mining industry. It is a major source of revenue to the counties, and Exploration Royalties. municipalities and school districts within the Taconite Assistance Area. The Production Tax distributed in 2019 is the tax due for Aggregate Material Tax the 2018 production year. The tax rate for concentrates and pellets This tax is administered at the county level. For more information, produced in 2018 was $2.751 per taxable ton. An additional tax go to www.revenue.state.mn.us and type Aggregate in the of three cents per ton is imposed for each 1 percent that the iron Search box. content exceeds 72 percent. The taxable tonnage for 2018 is the average tonnage produced in 2016, 2017 and 2018. If this tax County Taxes is imposed on other iron-bearing material, it is applied to the Other Taconite and Iron Ore Ad Valorem (Property) taxes are current-year production. paid directly to the counties. These are Property taxes assessed on auxiliary mining lands, unmined taconite, unmined natural The inside front cover illustrates how the Production Tax is iron ore, taconite railroads and severed mineral interests.