Mining Tax Guide - Minnesota State Legislature

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2011 Distribution of Taconite Production Tax 2010 Production Year Total Taconite Production Tax $79,138,000* Production tax is $2.380 per taxable ton. The three-year average taxable tonnage was 30,437,692 tons. . . . * Included is $6,696,292 from the state general fund (22.0 cpt) cpt = cents per taxable ton Other $9,844,775 IRRRB $17,007,197 Property tax relief and misc. $11,846,794 Counties $13,304,905 School districts $17,094,176 Cities and townships $10,040,153 32.3 cpt 55.9 cpt 38.9 cpt 43.7 cpt 56.2 cpt 33.0 cpt Taconite Economic Development Fund $9,673,605 31.8 cpt IRRRB Fund** $2,811,548 9.5 cpt Taconite Property Tax Relief $11,846,794 38.9 cpt Regular County Fund** $8,862,567 29.1 cpt Taconite School $0.0343 Fund** $1,296,216 4.3 cpt*** City and Township Mining & Conc Fund** $1,707,978 5.6 cpt Range Association of Municipalities & Schools $110,294 0.3 cpt IRRRB Fixed Fund $1,252,520 4.1 cpt County Road and Bridge Fund** $3,657,961 12.0 cpt Regular School $.1572 Fund** $5,670,746 18.6 cpt*** Township Fund $938,421 3.1 cpt Taconite Env. Protection Fund $6,386,643 21.0 cpt Taconite railroad $784,377 2.6 cpt Taconite railroad $1,106,935 3.6 cpt *** Hockey Hall of Fame $60,876 0.2 cpt Taconite Municipal Aid** $5,234,627 17.2 cpt Producer Grant & Loan Fund $2,782,967 9.1 cpt Building Maintenance Fund $1,217,160 4.0 cpt Taconite railroad $591,142 1.9 cpt IRR Educational Revenue Bonds $1,408,725 4.6 cpt Taconite Referendum $2,974,743 9.8 cpt Mining effects** $1,474,603 4.9 cpt ** Payments to the funds are guaranteed at a percentage level of the base year (1983 or 1999) by M.S. 298.225 for local aids and M.S. 298.293 for property tax relief. Douglas J. Johnson Economic Protection Trust Fund $842,910 2.8 cpt Guarantee Fund M.S. 298.225 M.S. 298.293 *** 0.0 cents per ton will be subtracted from state aids or levies a taconite school district would otherwise receive. School bond payments $4,021,158 13.2 cpt Iron Range Higher Education Acct $1,521,884 5.0 cpt Taconite Levy Shortfall Payment $807,218 2.7 cpt Special City/ Township Fund $93,382 0.3 cpt Transferred from schools for city/ township $0 0.0 cpt
2011 PRODUCTION TAX DISTRIBUTION ..........Inside front cover Minerals and Mining Agencies ..............................................................i INTRODUCTION .................................................................................. 1 TACONITE PRODUCTION TAX (M.S. 298.24, M.S. 298.28) ........ 5 2011 Legislation ............................................................................... 6 Distribution of Funds (M.S. 298.28) .............................................. 7 Aid Guarantee (M.S. 298.225) ......................................................11 Taconite Production Tax Distribution Calculation ....................12 Taconite Property Tax Relief .........................................................14 Taconite Homestead Credit Example ...........................................15 DIRECT REDUCED IRON (DRI) ....................................................24 IRON RANGE RESOURCES .............................................................25 OCCUPATION TAX (M.S. 298.01 - 298.18) ......................................30 2010 Occupation Tax Final Directive ..........................................31 Backup 2010 Data to Final Directive ...........................................32 INCOME TAX WITHHOLDING ON MINING AND EXPLORATION ROYALTY (M.S. 290.923) ......................................39 SALES AND USE TAX - Taconite and Iron Ore ................................42 CAPITAL EQUIPMENT EXEMPTIONS AND REFUNDS ..........44 SALES AND USE TAX - Aggregate Material .....................................45 AD VALOREM TAX ON AUXILIARY MINING LANDS FOR TACONITE OPERATIONS (M.S. 272.01) .........................................46 St. Louis County Mining Land Assessment Schedule ........................46 AD VALOREM TAX ON UNMINED TACONITE (M.S. 298.26) .47 AD VALOREM TAX ON UNMINED NATURAL IRON ORE (M.S. 272.03, M.S. 273.02; M.S. 273.12 - 273.13, M.S. 273.165, M.S. 273.1104) .........................................................................................48 AD VALOREM TAX ON TACONITE RAILROADS (M.S. 270.80 - 270.88) ............................................................................50 AD VALOREM TAX ON SEVERED MINERAL INTERESTS (M.S. 272.039, M.S. 272.04, M.S. 273.165) ..........................................51 TAXES ON OTHER MINING AND/OR EXPLORATION Ad Valorem Tax (M.S. 272 - M.S. 273) ........................................53 Net Proceeds Tax (M.S. 298.015 - 298.018) ................................54 Occupation Tax/Corporate Income Tax (M.S. 298.01) .............55 Withholding Tax on Royalty (M.S. 290.923) ..............................55 Sales and Use Tax (M.S. 297A) .....................................................55 GLOSSARY OF TERMS .......................................................................56 MINING INDUSTRY TAX CALENDAR .........................................58 MINNESOTA MESABI RANGE MAPS ...........................................59 MAP OF NORTHEASTERN MINNESOTA ...................................60 Table of Contents INTRODUCTION Figure 1 — Iron Ore Production Comparison ................................................................................1 Figure 2 — Distribution of Mining Taxes .......................................................................................2 Figure 3 — History of Minnesota Taconite Production ..............................................................3 Figure 4 — Minnesota Taxes Levied on Taconite ..........................................................................4 TACONITE PRODUCTION TAX Figure 5 — Douglas J. Johnson Economic Protection Trust Fund and Environmental Protection Fund .............................................................................. 13 Figure 6 — Taconite Property Tax Relief Fund Balance ............................................................ 14 Figure 7 — Taconite Property Tax Relief Fund Distribution ................................................... 14 Figure 8 — 57% & 66% Taconite Homestead Credit Example - 2011 ..................................... 15 Figure 9 — Taconite Production Tax Distribution - (2005-2010) ........................................... 16 Figure 10 — Taconite Production Tax Distributions to Cities & Townships - 2011 ...... 17 & 18 Figure 11 — Taconite Production Tax Distributions to School Districts - 2011 .................... 19 Figure 12 — Taconite Production Tax School Bond Credits and Payments ........................... 19 Figure 13 — Taconite Production Tax Distributions to Counties - 2011 ................................ 20 Figure 14 — Taconite Production Tax and Tax Revenue - by Company ................................. 20 Figure 15 — 2010 Production by Product Type ........................................................................... 21 Figure 16 — The Changing Trends in Minnesota Taconite Production ................................... 21 Figure 17 — Production Tax Rate History & Index Summary (new) ....................................... 22 Figure 18 — Taconite Produced and Production Tax Collected ................................................ 23 DIRECT REDUCED IRON (DRI) Figure 19 — World Direct Reduced Iron Production ................................................................. 24 IRON RANGE RESOURCES AND REHABILITATION BOARD Figure 20 — Fiscal Year 2012 IRRRB Budget ............................................................................... 27 Figure 21 — Taconite Economic Development Fund ................................................................. 28 Figure 22 —Taconite Industry Investments .................................................................................. 29 OCCUPATION TAX Figure 23 — Occupation Tax Mine Value-Taconite ................................................................... 33 Figure 24 — Occupation Tax Mine Value and Occupation Tax Paid - 2010 ........................... 34 Figure 25 — Occupation Tax Paid By Company (2003 - 2010) ................................................. 34 Figure 26 — Crude Ore Mined ..................................................................................................... 35 Figure 27 — Occupation Tax Collected on Iron Ore, Direct Reduced Iron & Taconite Production ................................................................................................................................... 36 Figure 28 — Taconite Industry Occupation Tax Report Averages on a Per Ton Basis ........... 37 Figure 29 — Taconite Industry Occupation Tax Report Average Cost Per Ton ...................... 38 INCOME TAX WITHHOLDING ON MINING AND EXPLORATION ROYALTY Figure 30 — Royalty Paid and Income Tax Withheld ................................................................ 40 Figure 31 — Average Royalty Cost Per Ton of Pellets Produced .............................................. 41 Figure 32 — Royalty Costs Per Ton (graph) ................................................................................ 41 SALES AND USE TAX Figure 33 — Use Tax Paid .............................................................................................................. 43 AD VALOREM TAX ON UNMINED TACONITE Figure 34 — Unmined Taconite Tax Paid ..................................................................................... 47 AD VALOREM TAX ON UNMINED NATURAL IRON ORE Figure 35 — Minimum Rates.......................................................................................................... 49 Figure 36 — Iron Ore Ad Valorem Tax Payable ........................................................................... 49 AD VALOREM TAX ON TACONITE RAILROADS Figure 37 — Taconite Railroad Ad Valorem Tax Assessed ......................................................... 50 AD VALOREM TAX ON SEVERED MINERAL INTERESTS Figure 38 — Tax Collection and Distribution .............................................................................. 51 Figure 39 — Severed Mineral Interest Return .............................................................................. 52 TAXES ON OTHER MINING AND/OR EXPLORATION Figure 40 — Index of Other Mining/Exploration Taxes ............................................................. 53 Figure 41 — Mining Employment and Wages.............................................................................. 55
Page 1: This document is made available ele
Page 5 and 6: The Minnesota Mining Tax Guide is p
Page 7 and 8: Figure 3 History of Minnesota Tacon
Page 9 and 10: Definition The taconite production
Page 11 and 12: Distribution of Funds (M.S. 298.28)
Page 13 and 14: The index is calculated as follows:
Page 15 and 16: (c) Occupation Tax Grandfather Amou
Page 17 and 18: Douglas J. Johnson Economic Protect
Page 19 and 20: Figure 8 Taconite Residential Homes
Page 21 and 22: Name Figure 10 Taconite Production
Page 23 and 24: 166 Cook County 5 1996 2016 $503,46
Page 25 and 26: Million Tons 40 35 30 25 20 15 10 5
Page 27 and 28: Year Production tons (000’s) Prod
Page 29 and 30: Iron Range Resources & Rehabilitati
Page 31 and 32: Figure 20 FY 12 Iron Range Resource
Page 33 and 34: Figure 22 Taconite Industry Investm
Page 35 and 36: Final Directive - 2010 Occupation T
Page 37 and 38: Year Figure 23 Occupation Tax Mine
Page 39 and 40: Figure 26 Crude Ore Mined Company 2
Page 41 and 42: Figure 28 Taconite Industry Occupat
Page 43 and 44: Income Tax Withholding on Mining an
Page 45 and 46: Figure 31 Average Royalty Cost Per
Page 47 and 48: Mandatory Electronic Payments If yo
Page 49 and 50: Aggregate material is nonmetallic n
Page 51 and 52: Ad Valorem Tax on Auxiliary Mining
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1996 4,448,800 1997 10,900 34,900 2
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Ad Valorem Tax on Severed Mineral I
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Taxes on Other Mining and Explorati
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Occupation Tax-Corporate Income Tax
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M.S. 298.225 — A Minnesota statut
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Index Map - Minnesota Mesabi Map Se
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Mining Tax Guide - Minnesota State Legislature

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