In a recent analysis on hardrock mining, the Government Accountability Office (GAO) found that among twelve western states, all assess royalties on minerals extracted from state land, some as high as 12 percent. Most of these states assess functional royalties as well, or taxes that function like royalties. For mining on taxpayer-owned federal lands, however, mining companies pay NO royalties to the federal government because they are governed by the outdated 1872 Mining Law.

For the new report, GAO gathered information from twelve western states: Alaska, Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. GAO compiled royalty data by reviewing state laws and consulting academic sources. They found that each of the states have royalties on hardrock mining and further all these states, with the exception of Oregon, have functional royalties, or taxes that work the same as royalties, on hardrock mining.

The data shows that royalty rates in these states range from around 2% to more than 10%. In Colorado the royalty on mining uranium on state lands can be above 12%. Additionally eleven states assess both royalties and functional royalties depending on the mineral. For example, Colorado assesses a severance tax on metallic minerals, including gold, at a rate of 2.25%. On top of that Colorado has a royalty of either 5% of gross value or 10% of net value for gold and silver mined on state lands.

As this review indicates, many states already have mining laws that require royalties for extracting minerals on state lands and federal lands should be treated no differently. It is time Congress reform the outdated 1872 Mining Law and ensure federal taxpayers receive fair compensation for minerals extracted on federal lands.

To see the full GAO report, click here.

For more information, please contact Autumn Hanna at (202) 546-8500 x112 or autumn [at] taxpayer.net.