In 2022 the Legislature passed SB250, which created an exploration tax credit available for certain non-coal minerals operations. (https://le.utah.gov/~2022/bills/static/SB0250.html)
If you are interested in more information, please contact John Rogers at 801.656.7741 or email him at firstname.lastname@example.org
Important definitions from the Statute are:
“Certified expenditure” means (a) a cost incurred for an activity in direct support of an exploration activity conducted at a specific site, including: (i) the cost of obtaining an approval, a permit, a license, or a certificate for an exploration activity; (ii) a direct labor cost and the cost of benefits for employees directly associated with work described in subsection (a); (iii) the cost of leasing equipment from a third party; (iv) the cost of owning, maintaining, or operating equipment; (v) insurance and bond premiums associated with the activities described in subsections (i) through (iv); (vi) the cost of a consultant or an independent contractor; and (vii) any general expense related to operating the business engaged in the exploration activity to the extent the expense is directly attributable to the work described in subsection (a). (b) “Certified expenditure” does not include: (i) return on investment; or (ii) insurance or bond premiums not described in subsection (a)(v).
“Closed mine” means a mine that: (a) previously operated; (b) does not currently operate; and (c) for which each mining approval, permit, license, or certificate that allowed the mine to operate is no longer in effect.
“Construction commencement date of a new mine” means the earliest date on which each of the following is true: (a) the owner or owner’s agent obtains for the mine each of the following that a reasonable and prudent person would consider adequate to commence construction of a mine: (i) each federal, state, or local government approval, permit, license, and certificate; and (ii) each right in land, including each permit, lease and title; (b) each approval, permit, license, and certificate described in subsection (a)(i) is in effect without any modification that might jeopardize the completion or continued construction of the mine; and (c) the construction, including the continuation of construction, is not temporarily or permanently enjoined by an order or other decision of a court or administrative body.
“Eligible claimant” means a person who: (a) is engaged in the business of mining or extracting minerals; (b) is subject to a severance tax under Title 59, Chapter 5, Part 2, Mining Severance Tax; and (c) makes a certified expenditure during the taxable year.
“Exploration activity” means (a) an activity performed in the state for the purpose of determining the existence, location, extent, or quality of a mineral deposit and includes: (i) a surveying by a geophysical method or by a geochemical method; (ii) drilling one or more exploration holes; (iii) conducting underground exploration; (iv) surface trenching or bulk sampling; (v) taking aerial photographs; (vi) geological and geophysical logging; (vii) sample analysis; (viii) metallurgical testing. (b) “Exploration activity” does not include an activity that occurs: (i) after the construction commencement date of a new mine; or (ii) if the mine is or was a closed mine, after the mine reopening date.
“Geochemical method” means a method of gathering geochemical data, including collecting soil, rock, water, air, vegetation, or another similar item and performing a chemical analysis on the item.
“Geophysical method” means a method of gathering geophysical data that is used in mineral exploration, including seismic, gravity, magnetic, radiometric, radar, electromagnetic, and other remote sensing measurements.
“Mine” means the same as that term defined in Section 59-5-201.
“Mine reopening date” means with respect to a closed mine, the earliest date on which each of the following is true: (a) the owner or owner’s agent obtains for the closed mine each of the following that a reasonable and prudent person would consider adequate to begin operation of a closed mine: (i) each federal, state, or local government approval, permit, license, and certificate; and (ii) each right in land, including each permit, lease, and title; (b) each approval, permit, license, and certificate described in subsection (a)(i) is in effect without modification that might jeopardize resuming operation of the closed mine; and (c) resuming operation of the closed mine is not temporarily or permanently enjoined by an order or other decision of a court or administrative body.
“Mineral” means a metalliferous mineral as defined in Section 59-5-201.
“Tax credit certificate” means a certificate as defined in Section 40-6-24.
The new rules that will guide the process are: