Nev. Admin. Code § 362.10 — 362.10

NAC 362.010    Determination of gross value of mineral products. ( NRS 360.090 , 362.120 )
1.  For the purposes of assessment and taxation
of the net proceeds of minerals pursuant to chapter
362 of NRS, the gross value of mineral products must be determined in
accordance with the provisions of this section.
2.  In those cases where a mineral product is
sold by the producer in an arms-length transaction in free market competition,
the gross value of the product is an amount equal to the proceeds of the sale
of the product. This subsection applies to sales realized on all minerals
produced from mining, including, without limitation, reduction, beneficiation
or any treatment used by the producer within or outside this State to obtain a
mineral product which is commercially marketable.
3.  In those cases where a product is
exchanged for any thing or service or removed from the State in a form ready
for use or sale, but not used or sold during the period covered by the
statement required by NRS 362.110
to be filed, the gross value of the product is:
(a) For sales of minerals that do not involve
derivative financial transactions, the price stated in the contract or other
document of sale if one is in existence; or
(b) If minerals are transferred in kind or used to
support derivative financial transactions, the closing spot price on the date
of the taxable event. The spot price for precious metals will be determined by
the Department by using a recognized national or international publication of
prices such as the London PM fix. If no organized commodity exchange exists for
a particular mineral product, the price will be the realized sales price of the
mineral product.
4.  In those cases where the mineral product
is used by the producer or disposed of by the producer in any kind of
transaction which is not at arms-length, including, without limitation, such
transactions with associated or affiliated companies, the gross value of the
mineral product so used or disposed of will be determined by the Department by
utilizing information supplied by the producer under this subsection and from
such other appropriate sources as the Department deems necessary. The mineral
producer shall supply the Department with the following information for each
reporting period:
(a) The producer’s profit and loss statements;
(b) The proportionate profit reports and the
calculations used to prepare them;
(c) The allocation of income by states;
(d) The amount used to calculate the percentage of
depletion allowances; or
(e) The monthly average price of the product for
the months in which it was used in a manufacturing process or to provide a
service.
5.  Any information submitted pursuant to
paragraphs (a) to (d), inclusive, of subsection 4 must be the same as submitted
to the Internal Revenue Service.
6.  The producer has the burden of proof in
any determination under this section of the gross value of mineral products
used or disposed of by the producer.
7.  As used in this section:
(a) “Derivative financial transaction” means a
financial transaction which uses:
(1) A financial instrument that has no
intrinsic value, but which derives its value from a contract to deliver
minerals in the future at a specific price; or
(2) An option that gives a party to the
transaction the opportunity to buy minerals from or sell minerals to the other
party to the transaction at a prearranged price.
(b) “Spot price” means the price established for
physical delivery of a mineral by an organized commodity exchange on the date
of the taxable event.
(c) “Transferred in kind” means a transaction in
which a mineral product is delivered instead of cash to complete the
transaction.
[Tax Comm’n, Mine Proceeds Reg. No. 26, eff. 1-24-78;
renumbered as Reg. No. 1, 1-22-79]—(NAC A 5-3-84; R048-01, 11-1-2001)