Purchase Requirements
An item qualifies for the exemption, if it meets all of the following requirements:
- Primarily used in the mining process. (See Idaho Code section 63-3607A.)
- Necessary or essential – you can’t remove or process ore without it.
- Directly used in or consumed during mining or ore processing – after the beginning and before the end of the process:
- The mining process begins when you start to develop a known ore deposit
- The process ends when the ore is at the later point of
– When you place it in storage, even temporarily, to be prepared for shipment or
– When the ore’s ready to be sold in its final form
- Tangible personal property – must not become real property
- Allowable by law – must not be specifically excluded from the mining production exemption by law or rule
Exempt Purchases — Mining
The production exemption lists items that are exempt from tax. Qualifying miners can also buy the following items exempt:
Note: There are separate sections for underground mining and for above-ground and open pit mining.
Underground mining
Equipment and supplies used to develop a mine with known ore deposits
- Diamond drills and attachments
- Levels, laterals, crosscuts, drifts, stopes, raises, and shafts
Note: Equipment, supplies, and materials used in exploration activities aren’t exempt.
Mine support materials
Timbers, rock bolts, concrete, matting
Slushing and mucking equipment
Used to convey broken ore and waste to passes and chutes
- Slushers, muckers, scrapers
- Loaders, hoists
- Backhoes used to recover ore and waste
Equipment used for drilling blast holes
- Pneumatic rock drills
- Air compressors that supply compressed air to operate pneumatic drills
Extraction and retrieval equipment
Used to extract the minerals and ore from the mine
- Blasting supplies: explosives, caps, fuses
- Loaders, backhoes, and similar earthmoving equipment
Equipment used to move ore, waste, and people from the mine to the surface
- Haulage equipment
- Locomotives, cars, batteries
- Tracks and supplies
- Ore dumps and bins
- Electrical distribution systems, including light signals
- Vertical and horizontal support and transport
- Skips, hoists, hoist cables
- Shafts, shaft timbers, shaft pockets, shaft guides
- Concrete
Backfilling equipment used to backfill mined-out areas
- Pumps, including sumps
- Pipes
- Concrete
- Supplies
Quality control equipment and supplies
- Assaying
- Sampling
Safety equipment and supplies
If required by a state or federal agency and if used in the production area
- Hard hats
- Miners’ lights
- Belts
- Batteries
Pollution control equipment, supplies, and materials
If they:
- Are required* to meet air and water quality standards
- Become part of the pollution control equipment, or
- Are used to operate the pollution control equipment, or
- Are used to treat the effluent from the mining process.
* The standards must be set by a state or federal agency that has authority to set them.
Note: Pollution control materials or equipment that become part of real property may also be exempt for mining companies that qualify for the production exemption. (See Idaho Code section 63-3622X.)
Examples of pollution control equipment that aren’t exempt:
- A building or other structure that merely houses the equipment
- Construction equipment used to build or install pollution control equipment
Aboveground, open pit mining
Blasting and drilling equipment
Used to loosen or remove ore and overburden
- Track drills, rotary drills
- Drill rods, drill bits
- Compressors to operate drills
Extraction and removal equipment
Used to remove loosened ore and overburden from the pit
- Loaders
- Excavators
- Backhoes
- Power shovels
Haulage equipment
Used to move ore and overburden to stockpiles, loading sites, or disposal sites at the mine
- Heavy equipment
- Transport equipment
- Scrapers, carryalls
- Off-highway trucks and trailers
- Conveyors
Equipment used for sorting, grading, sizing, and crushing ore and overburden
- Bulldozers
- Loaders
- Crushers
- Conveyors
- Grading
- Sorting
- Sizing
- Crushing
Pollution control equipment, supplies, and materials
If they:
- Are required* to meet air and water quality standards
- Become part of the pollution control equipment, or
- Are used to operate the pollution control equipment, or
- Are used to treat the effluent from the mining process.
* The standards must be set by a state or federal agency that has authority to set them.
Note: Pollution control materials or equipment that become part of real property may also be exempt for mining companies that qualify for the production exemption. (See Idaho Code section 63-3622X.)
Examples of pollution control equipment that aren’t exempt:
- A building or other structure that merely houses the equipment
- Construction equipment used to build or install pollution control equipment