Current through August 31, 2023
Section
47-1202, Idaho Code.
(3-31-22)
01.
Election.
The taxpayer may elect to use one (1) of the methods prescribed in Section
47-1202, Idaho Code, for the
measurement of the mine license tax. This election must be made in writing and
attached to the first mine license tax return filed. If no timely written
election is made, the taxpayer shall be presumed to have elected to compute the
mine license tax in accordance with the method described in Section
47-1202(a), Idaho
Code. Once an election is made, the taxpayer may not change the method of
computing his tax unless he receives written permission from the Tax Commission
prior to the due date of the return. (3-31-22)
a. This election is not available to
taxpayers whose only taxable mining activity is receiving royalties. Such
taxpayers must determine their mine license tax liability by use of the method
described in Section
47-1202(a), Idaho
Code. (3-31-22)
b. Taxpayers whose
mining activity includes both the receiving of royalties and the extracting of
ores must separately determine that portion of their mine license tax liability
arising from the royalty received by using the method described in Section
47-1202(a), Idaho
Code. However, the taxpayer may elect to determine that portion of their mine
license tax liability arising from their extraction of ores by use of either
method for which a proper election has been made. The separate determination
may not be netted together or offset against each other.
(3-31-22)
02.
Method Under Section
47-1202(a)
. For each taxpayer using the method described in Section
47-1202(a), Idaho
Code, the net value of ores mined shall be the amount of taxable income from
the property as defined by Section
613, Internal Revenue Code, and
Treasury Regulation 1.613-5 less the deduction for depletion expense on the
property that was allowed in the taxpayer's federal income tax return. For
taxpayers receiving royalties, gross royalties shall be reduced by the
deduction for depletion expense on the royalty that was allowed in the
taxpayer's federal income tax return. (3-31-22)
03.
Method Under Section
47-1202(b)
. For each taxpayer using the method described in Section
47-1202(b), Idaho
Code, the net value of ores mined shall be the result of the computations in
Subsections 030.03.a. through 030.03.c.
(3-31-22)
a. Gross value of the ores shall be
equal to that determined by the U.S. Department of Interior during the same
taxable year for purposes of identifying the amount of mineral royalties to be
paid for the privilege of mining public lands. This value shall apply
regardless of whether the ore is extracted from public, tribal, or private
land. If the taxpayer is mining properties for which a royalty must be paid,
the taxpayer must attach to the mine license tax return a copy of the value
determination made by the U.S. Department of the Interior. (3-31-22)
b. From the gross value determined in
Subsection 030.03.a., the taxpayer shall
deduct direct mining costs attributable to the Idaho production of the ores and
Idaho transportation costs to the point at which they are valued by the U.S.
Department of the Interior. (3-31-22)
c. From the amount in Subsection
030.03.b., the taxpayer shall
also deduct a portion of the depletion expense attributable to the property
that was allowed as a deduction in the taxpayer's federal income tax return for
the same taxable year. The deductible portion shall be determined by
multiplying the depletion expense allowed on the federal income tax return by
the ratio of the gross value of ores for mine license tax purposes to the gross
value of ores for federal percentage depletion purposes. For purposes of this
computation, all references to gross value and depletion expense shall be
limited to those arising from mining conducted in Idaho.
(3-31-22)
