2007 Minnesota Statutes

298.016 GROSS PROCEEDS.
    Subdivision 1. Computation; arm's-length transactions. When a metal or mineral product
is sold by the producer in an arm's-length transaction, the gross proceeds are equal to the proceeds
from the sale of the product. This subdivision applies to sales realized on all metal or mineral
products produced from mining, including reduction, beneficiation, or any treatment used by a
producer to obtain a metal or mineral product which is commercially marketable.
    Subd. 2. Other transactions. When a metal or mineral product is used by the producer or
disposed of in a non-arm's-length transaction, the gross proceeds must be determined using the
alternative computation in subdivision 3. Transactions subject to this subdivision include, but are
not limited to, shipments to a wholly owned smelter, transactions with associated or affiliated
companies, and any other transactions which are not at arm's length.
    Subd. 3. Alternative computation. The commissioner of revenue shall determine the
alternative computation of gross proceeds using the following procedure:
(a)(1) Metal and mineral prices shall be determined by using the average annual market price
as published in the Engineering and Mining Journal; (2) For metals or mineral products with a
monthly or weekly price quotation in the Engineering and Mining Journal, but for which no
average annual price has been published, an arithmetic average of the monthly or weekly prices
published in the Engineering and Mining Journal shall be used; (3) If the price of a particular
metal or mineral product is not published in the Engineering and Mining Journal, another
recognized published price, as established by the commissioner of revenue will be used.
(b) The quantity of each particular metal or mineral product recovered and paid or credited
for by the smelter will be multiplied by the average annual market price as determined in clause
(a). Special smelter charges for particular metals will be allowed as a deduction from this price.
The resulting amount will be the gross proceeds for calculating the tax in section 298.015.
    Subd. 4. Definitions. For the purposes of sections 298.015 and 298.017, the terms defined in
this subdivision have the meaning given them unless the context clearly indicates otherwise.
(a) "Metal or mineral products" means all those mineral and energy resources subject to
the tax provided in section 298.015.
(b) "Exploration" means activities designed and engaged in to ascertain the existence,
location, extent, or quality of any deposit of metal or mineral products prior to the development
of a mining site.
(c) "Development" means activities designed and engaged in to prepare or develop a
potential mining site for mining after the existence of metal or mineral products in commercially
marketable quantities has been disclosed including, but not limited to, the clearing of forestation,
the building of roads, removal of overburden, or the sinking of shafts.
(d) "Research" means activities designed and engaged in to create new or improved methods
of mining, producing, processing, beneficiating, smelting, or refining metal or mineral products.
History: 1987 c 268 art 9 s 27