47-1202. NET VALUE OF ORE TO BE USED AS MEASURE OF TAX — HOW DETERMINED. For the purpose of measuring and determining the amount of tax to be paid under the provisions of section 47-1201, Idaho Code, the royalties as defined in subsection (b) of section 47-1201, Idaho Code, or the net value of ore mined shall be computed under one (1) of the following methods at the election of the taxpayer. Such election, once made, shall be binding for all succeeding years unless the taxpayer secures permission from the state tax commission to change to another method:

(a) Ores mined within the state shall be valued by deducting from the gross value of the ore, all costs of mining and processing such ore, using the formula prescribed in section 613 of the Internal Revenue Code and Treasury Regulation 1.613-5 for computation of the net income from mining for depletion purposes, less the deduction of depletion as computed under section 613 of the Internal Revenue Code and Treasury Regulation 1.613-5; or

(b) Ores mined within the state shall be valued using the gross value determined by the U.S. Department of the Interior for computation of the value of minerals on public lands for federal royalty purposes, less the following deductions:

(1) all costs of mining and transporting such ore to the point at which the value for federal royalty purposes is determined by measurement of the quantity of ore mined; these costs to include only those directly incurred in and attributable to the actual mining and transportation operation in the state of Idaho, and

(2) the applicable portion of the federal deduction for depletion, allocated on the ratio of the gross value of the ore used for this computation, to the gross value of the ore used in the federal depletion computation.

History:

[47-1202, added 1935 (1st E.S.), ch. 65, sec. 2, p. 182; am. 1941, ch. 106, sec. 2, p. 188; am. 1972, ch. 99, sec. 2, p. 209; am. 1973, ch. 43, sec. 1, p. 78; am. 1977, ch. 93, sec. 2, p. 190; am. 1996, ch. 381, sec. 1, p. 1294.]