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Taxation and Revenue Structure

In general, mining operations and property in Michigan are subject to the same state and local taxes applicable to other commercial ventures. However, certain mining operations are subject to specific taxes levied on the minerals, mineral-bearing land from which the minerals are mined, and/or property related to the mining operation, in lieu of other state and local taxes.

In 2012, Michigan enacted specific legislation relating to the taxation of nonferrous metallic minerals extracted from the earth in Michigan. The Nonferrous Metallic Minerals Extraction Severance Tax Act levies a "severance" tax on taxpayers that extract minerals from the earth in Michigan or that beneficiate such minerals. In general, the minerals severance tax is levied at a rate of 2.75 percent of the "taxable mineral value" computed at the time of sale or transfer of a "taxable mineral." In addition to providing targeted tax credits, this legislation also provides various tax exemptions relating to minerals, mineral mining-related property (and property involved in the beneficiation of minerals), and certain income derived from the minerals. For more information, please see the Mining Guidebook.