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People who explore and develop lithium resources in Nevada would get a tax break under a proposal before the state legislature.
Assemblyman
Jim Wheeler, R-Minden, and
Sen. Pat Spearman, D-North Las Vegas, are making the proposal in the form of a bill draft request, the predecessor to a bill.
Although the bill isn’t yet written, Wheeler said it would seek to exempt from sales tax equipment and supplies used to explore for and develop lithium.
The idea, Wheeler said, is to encourage mining and refinement of lithium in the state.
“There is a lot of lithium in Nevada,” Wheeler said. “We would be the fourth largest supplier in the world if we were to actually take advantage of our lithium.”
A writer on the investment website Seeking Alpha
reported on the bill draft request Wednesday morning.
The only fully active lithium operation in Nevada is near Silver Peak in Esmeralda County. There are known deposits in Humboldt County as well.
Wheeler said lithium extracted from Nevada is shipped overseas for processing then shipped to the U.S. and elsewhere for use in products.
The tax breaks would cover processing equipment to encourage companies to complete the production cycle entirely in Nevada, he said.
“We are going to try and get some tax breaks for exploration and production,” Wheeler said.
Wheeler said any losses to the state from the sales tax break would be offset by gains in mining taxes from expanded production, although he didn’t have an independent analysis to support the assertion.
Bob Fulkerson, state director and co-founder for the
Progressive Leadership Alliance of Nevada, said, contrary to Wheeler’s assertion, tax breaks for lithium mining would be harmful to the state.
Fulkerson said by avoiding sales taxes lithium companies would be avoiding contributions other taxpayers make to support schools, mental health treatment, public safety and other vital services.
“We have got so many unmet needs in Nevada the list is nauseating,” Fulkerson said, noting
Washoe County voters recently approved even higher sales tax to raise money to reduce school crowding. “(Lithium mining companies) should have to pay the same taxes as everyone else.”
The mineral is a key component in lithium-ion batteries, which can be used to power everything from mobile phones to electric cars.
The electric car company Tesla Motors and battery-maker Panasonic have a factory in Storey County that produces battery cells for Tesla vehicles. Tesla built the factory after the state legislature and Gov. Brian Sandoval agreed to provide the company $1.3 billion in tax breaks to choose Nevada over other possible locations.
Tesla, who Sandoval says will add gearbox and motor production to the factory, says they plan to employ as many as 6,500 people but so far the number is about 1,000.
Wheeler is considered among the most conservative legislators and Spearman among the most liberal.
But in May
each received $1,000campaign contributions from
Western Lithium, a company that would benefit from the legislation. The donations were the company's only 2016 donations to state lawmakers. Prior to the Spearman and Wheeler campaign contributions Western Lithium the company's previous reported contributions were in 2012 and 2008,
according to state campaign finance records.
Wheeler said the contributions did not prompt the lawmakers to come up with the bill draft request. He said the company made the donations after lawmakers had already decided to ask for the tax breaks bill.
“That is just kind of normal,” Wheeler said. “We obviously are pushing something they like.”
Spearman did not respond to a phone call for comment nor to a message with the Nevada Democratic Senate Caucus.