Purchases that Qualify for the Mining Exemption

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