(3) Alternate computation of gross proceeds.
If products are sold or transferred to a person operating a smelting, refining or other processing or marketing facility which is located outside of the United States or to a controlled entity or controlling entity of the seller or transferor and if the secretary determines that the gross proceeds under sub. (1) (am)
do not reflect or demonstrate the gross proceeds that would have been received from an unrelated purchaser for the product under similar circumstances, the gross proceeds shall be computed under this subsection. For the purpose of this subsection “control" means direct or indirect ownership of at least 50 percent of the total combined voting stock of the corporation. The gross proceeds shall be computed by multiplying that part of the production of recovered metalliferous minerals which were sold or transferred during the taxable year by the average price of that mineral for the taxable year and then subtracting the cost of postmining processes, including the cost of capital (interest and earnings) imputed to that production. The average price shall be computed from the monthly prices published in the engineering and mining journal as follows:
Taconite pellets, lower lake ports price, net of unloading charges.
Copper, United States producer price, F.O.B. refinery.
Other metalliferous minerals or other forms of metalliferous minerals not including mineral aggregates such as stone, sand and gravel, at a price determined by the secretary, by rule, from a nationally known publication or other nationally known source listing prices of metalliferous minerals.
If the costs are not excluded in determining gross proceeds and are actually incurred or accrued, there shall be allowed to persons subject to the tax under sub. (2)
the following deductions:
The actual and necessary expenses incurred during the taxable year for labor, tools, appliances and supplies used in mining metalliferous minerals, including the labor of the lessee and the lessee's employees and the amount expended by the lessee for tools, appliances and supplies used by the lessee in the mining operation. The personal labor of the lessee shall be computed at the prevailing wage rate.
The actual and necessary expenses for mining including extracting, transporting, milling, concentrating, smelting, refining, reducing, assaying, sampling, inventorying and handling the ore and for further processing and transferring related to the product for which gross proceeds are received, including the cost of capital (interest and earnings) imputed to smelting and refining expenses.
The actual and necessary expenses for administrative, appraising, accounting, legal, medical, engineering, clerical and technical services directly related to mining metalliferous minerals in this state, excluding salaries and expenses for corporate officers and for lobbying, as defined in s. 13.62 (10)
The actual and necessary expenses directly related to the repair and maintenance of any machinery, mills, reduction works, buildings, structures, other necessary improvements, tools, appliances and supplies used in mining metalliferous minerals extracted in this state.
Except as provided in par. (em)
, federal income taxes paid, state income or franchise taxes paid, property taxes, sales taxes and use taxes paid and other taxes paid and deductible by corporations in computing net income under s. 71.26 (2)
which are allocable to the mine, excluding the tax under this section.
In the case of a mine owned by a corporation that owns other business operations or is part of an affiliated group of corporations eligible to file consolidated federal income tax returns, the determination of deductible state income or franchise taxes and federal income taxes shall be made by calculating the taxable income from the mine as though the mine were a separate entity and applying the federal income tax laws and state income or franchise tax laws to this income as though the mine were filing a separate income or franchise tax return. To calculate taxable income, federal taxable income as it applies to the depletion deduction under section 613
of the internal revenue code shall be adjusted to reflect the difference between Wisconsin income or franchise tax law and federal income tax law.
Rents paid on personal property used in mining metalliferous minerals.
The cost of relocating employees within this state.
The cost of premiums for insurance on persons or tangible assets relating to mining metalliferous minerals.
Losses from uninsured casualty losses and the sale of personal property used in mining metalliferous minerals.
Depreciation or amortization on property used in connection with mining. With respect to property first eligible for depreciation or amortization before January 1, 1981, the deduction shall be limited to the deduction under s. 70.375 (4) (k)
, 1979 stats. With respect to property first eligible for depreciation or amortization on or after January 1, 1981, the deduction shall be limited to the amount allowable as a deduction to corporations in computing net income under s. 71.26 (2)
. The following assets may be depreciated or amortized:
Permit fees, license fees and any other fees for formal written authorization required by a department or instrumentality of the state.
Development of the mine after the date on which extraction begins.
Royalties paid to owners of the mineral rights to the lands where the mine or an extension of the mine is located. In this paragraph, “owners" does not include the person mining or a controlled entity or controlling entity of the person mining.
Amortization by a straight-line method over the life of the mine commencing with production of premining costs, including costs for drilling, geological and engineering studies, design of facilities, pilot mines, mine testing, environmental surveys, facilities siting surveys and other exploration and development activities.
Expenses under par. (m)
incurred after mining begins, those costs to be expensed currently.
Actual and necessary reclamation and restoration costs associated with a mine in this state, including payments for future reclamation and postmining costs which are required by law or by department of natural resources order and fees and charges under chs. 281
not otherwise deductible under this section. Any refunds of escrowed or reserve fund payments allowed as a deduction under this paragraph shall be taxed as net proceeds at the average effective tax rate for the years the deduction was taken.
If the interest is specifically allocable to the development or operation of a mine or beneficiation facility from which net proceeds are derived, all of the interest is deductible.
If the interest is not specifically allocable to the development or operation of a mine or beneficiation facility, the proportion of the interest that equals the proportion of the capital investment in the mine and beneficiation facilities as compared to the taxpayer's total capital investment.
If a mine is owned by a corporation that is part of an affiliated group of corporations, “interest" means the interest paid to nonmembers of the group.
The deduction for interest under this paragraph shall not exceed 5 percent of the total gross proceeds for the taxable year.
An allowance for depletion of ores on the basis of their actual original cost in cash or the equivalent of cash.
(4m) Generally accepted accounting principles.
Except as otherwise provided under this section, a person subject to the tax imposed under sub. (2)
, shall use generally accepted accounting principles to determine the person's net proceeds occupation tax liability under this section.
The tax to be assessed, levied and collected upon persons engaging in mining metalliferous minerals in this state shall be computed at the following rates:
On the amount from $250,001 to $5,000,000, at a rate of 3 percent.
On the amount from $5,000,001 to $10,000,000, at a rate of 7 percent.
On the amount from $10,000,001 to $15,000,000, at a rate of 10 percent.
On the amount from $15,000,001 to $20,000,000, at a rate of 13 percent.
On the amount from $20,000,001 to $25,000,000, at a rate of 14 percent.
On the amount exceeding $25,000,000, at a rate of 15 percent.
For calendar year 1983 and corresponding fiscal years and thereafter, the dollar amounts in sub. (5)
and s. 70.395 (1)
and (2) (d) 1m.
and 5. a.
shall be changed to reflect the percentage change between the gross national product deflator for June of the current year and the gross national product deflator for June of the previous year, as determined by the U.S. department of commerce as of December 30 of the year for which the taxes are due, except that no annual increase may be more than 10 percent. For calendar year 1983 and corresponding fiscal years and thereafter until calendar year 1997 and corresponding fiscal years, the dollar amounts in s. 70.395 (1m)
, 1995 stats., shall be changed to reflect the percentage change between the gross national product deflator for June of the current year and the gross national product deflator for June of the previous year, as determined by the U.S. department of commerce as of December 30 of the year for which the taxes are due, except that no annual increase may be more than 10 percent. The revised amounts shall be rounded to the nearest whole number divisible by 100 and shall not be reduced below the amounts under sub. (5)
on November 28, 1981. Annually, the department shall adopt any changes in dollar amounts required under this subsection and incorporate them into the appropriate tax forms.
See also s. Tax 12.20
, and 12.23
, Wis. adm. code.
NOTE: 2005 Wis. Act 347
, which affected this section, contains extensive explanatory notes.
Reports, appeals, estimated liability. 70.38(1)(1)
On or before June 15, persons mining metalliferous minerals shall file with the department a true and accurate report in the form the department deems necessary to administer the tax under s. 70.375
. The books and records of the person shall be open to inspection and examination to employees of the department designated by the secretary and to the state geologist.
(1m) Estimated liability.
Upon written request and for sufficient reason shown, the department shall allow a person subject to the tax under s. 70.375
to file, on or before June 15, a net proceeds tax return and to pay that tax based upon estimated tax liability. On or before September 15, that person shall file a final report and pay any additional tax due along with interest at the rate of 1 percent per month from June 15 until the date of payment. If the additional tax exceeds 10 percent of the person's tax under s. 70.375
for the previous year, the penalty and interest under s. 70.39 (1)
apply. If the final report indicates that the person overpaid the person's liability, the department shall refund the overpayment.
(2) Combined reporting.
If the same person extracts metalliferous minerals from different sites in this state, the net proceeds for each site for which a permit has been issued under s. 293.49
shall be reported separately for the purposes of computing the amount of the tax under s. 70.375 (5)
Any person feeling aggrieved by the assessment notice shall, within 60 days after the receipt of the notice, file with the department a petition for redetermination setting forth the person's objections to the assessment. The person may request an informal conference with representatives of the department prior to September 15. The request shall be indicated in the petition. The secretary shall act on the petition on or before October 1. On or before November 1, the person shall pay the amount determined by the secretary pursuant to the secretary's action on the petition. If the person is aggrieved by the secretary's denial of the petition the person may appeal to the tax appeals commission if the appeal is filed with the commission on or before December 1.
Determinations of the tax appeals commission shall be subject to judicial review under ch. 227
See also ch. TA 1
and s. Tax 12.25
, Wis. adm. code.
Collection of the tax.
All taxes as evidenced by the report under s. 70.38 (1)
are due and payable to the department on or before June 15, and shall be deposited by the department with the secretary of administration.
Collection of delinquent tax. 70.39(1)
Taxes due and unpaid on June 15 shall be deemed delinquent as of that date, and when delinquent shall be subject to a penalty of 4 percent of the tax and interest at the rate of 1.5 percent per month until paid. The parent shall be liable for any delinquent taxes of a subsidiary person. The department shall immediately proceed to collect the tax due, penalty, interest and costs. For the purpose of collection the department or its duly authorized agent has the same powers as conferred by law upon the county treasurer, county clerk, sheriff and district attorney.
Any part of an assessment which is contested before the tax appeals commission or the courts, which after hearing shall be ordered to be paid, shall be considered as a delinquent tax if unpaid on the 10th day following the date of the final order and shall be subject to the penalty and interest provisions under sub. (1)
After the tax becomes delinquent, the department shall issue a warrant to the sheriff of any county of the state in which the metalliferous mineral property is located in total or in part. The warrant shall command the sheriff to levy upon and sell sufficient of the person's metalliferous mineral property found within the sheriff's county, to pay the tax with the penalties, interest and costs, and to proceed in the same manner as upon an execution against property issued out of a court of record, and to return the warrant to the department and pay to it the money collected, or the part thereof as may be necessary to pay the tax, penalties, interest and costs, within 60 days after the receipt of the warrant, and deliver the balance, if any, after deduction of lawful charges to the person.
Within 5 days after the receipt of the warrant the sheriff shall file a copy of it with the clerk of circuit court of the county, unless the person makes satisfactory arrangements for payment with the department, in which case, the sheriff shall, at the direction of the department, return the warrant to it.
The clerk of circuit court shall enter the warrant as a delinquent income or franchise tax warrant as required under s. 806.11
. The clerk of circuit court shall accept, file, and enter the warrant without prepayment of any fee, but shall submit a statement of the proper fees within 30 days to the department of revenue. Upon audit by the department of administration on the certificate of the secretary of revenue, the secretary of administration shall pay the fees and the fees shall be charged to the proper appropriation for the department of revenue.
The sheriff shall be entitled to the same fees for executing upon the warrant as upon an execution against property issued out of a court of record, to be collected in the same manner.
Upon the sale of any real estate the sheriff shall execute a deed of the real estate, and the person may redeem the real estate as from a sale under an execution against property upon a judgment of a court of record. No public official may demand prepayment of any fee for the performance of any official act required in carrying out this section.
Distribution and apportionment of tax. 70.395(1)
In this section, “first-dollar payment" means an amount equal to $100,000 adjusted as provided in s. 70.375 (6)
Fifteen days after the collection of the tax under ss. 70.38
, the department of administration, upon certification of the department of revenue, shall transfer the amount collected in respect to mines not in operation on November 28, 1981, to the investment and local impact fund, except that, after the payments are made under sub. (2) (d) 1.
, and 2m.
, the department of administration shall transfer 60 percent of the amount collected from each person extracting ferrous metallic minerals to the investment and local impact fund and 40 percent of the amount collected from any such person to the general fund.
(2) Investment and local impact fund. 70.395(2)(b)(b)
There is created an investment and local impact fund under the jurisdiction and management of the investment and local impact fund board, as created under s. 15.435
The board shall, according to procedures established by rule:
Certify to the department of administration the amount of funds to be distributed under pars. (d)
and to be paid under par. (j)
Annually on the first Monday in January, except as provided in subd. 5. b.
, the department of administration shall distribute, upon certification by the board:
To each county in which metalliferous minerals are extracted, the first-dollar payment.
To each county in which metalliferous minerals are extracted, 20 percent of the tax collected annually under ss. 70.38
from persons extracting metalliferous minerals in the county or $250,000, whichever is less, to be used for mining-related purposes.
To each city, town or village in which metalliferous minerals are extracted, the first-dollar payment minus any payment during that year under par. (d) (intro.)
or subd. 5.
If the minable ore body is located in 2 contiguous municipalities and if at least 15 percent of the minable ore body is in each municipality, each qualifying municipality shall receive a full payment specified in this subdivision as if the ore body were located solely within that municipality. The department of revenue shall annually change the dollar amount specified in this subdivision as specified in s. 70.375 (6)
except that the dollar amount may not be reduced below the dollar amount under this subdivision on November 28, 1981.
To any Native American community that has tribal lands within a municipality qualified to receive a payment under this section, an amount equal to $100,000 minus any payments during that year under par. (d) (intro.)
or subd. 5.
Annually, the dollar amount in this subdivision shall be adjusted as specified under s. 70.375 (6)
Where the tax under ss. 70.37
is in respect to a mining site which is located in more than one county or municipality the distribution under subds. 1.
shall be as follows:
On or before February 10 of each year persons extracting metalliferous minerals in this state shall report to the department the amount of crude ore extracted from each municipality and county in the state in the previous year. The data shall detail the total amount of crude ore extracted from each mine and the portion of the total taken from each municipality and county. This data shall be included in the report required by s. 70.38 (1)
Each county's proportion of the amount determined under subd. 1.
shall be equal to the ratio of the amount of crude ore extracted from the mine in that county to the total amount of crude ore extracted from the mine multiplied by the amount determined under subd. 1.
To the investment and local impact fund an amount equal to 10 percent of the taxes paid by each mine plus all accrued interest on that amount for a project reserve fund. The funds shall be withdrawn by the investment and local impact fund board to be used for the following purposes in respect to the municipality or municipalities in which the mine is located:
To ensure an annual payment to each municipality under subds. 1.
in an amount equal to the average payment for the 3 previous years to that municipality.
To reimburse municipalities for costs associated with the cessation of mining operations.