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Last Updated: 1/23/2017

Ad Valorem Tax on Auxiliary Mining Lands for Taconite Operations

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Minnesota Statutes 272.01

Lands and structures actively used for taconite production are exempt from the Ad Valorem Tax and are subject to the Production Tax in lieu of Property Tax. Actively used lands include the plant site, mining pit, stockpiles, tailings pond and water reservoirs.  Also included are lands stripped and ready for mining, but not lands merely cleared of trees.  It is important to note that this exemption applies only to the Ad Valorem Tax on the land and buildings and not to the Unmined Taconite Tax. See Ad Valorem Tax on Unmined Taconite for more information.  Lands adjacent to these facilities, commonly referred to as auxiliary mining lands, are subject to assessment of Ad Valorem Tax administered by the county.

 

The county assessor is responsible for estimating the market value of auxiliary mining lands and classifying them into one of several property classifications established by Minnesota law.  The two most common property classifications used on auxiliary mining lands are industrial and rural vacant land.  In general, lands in close proximity to active taconite operations are assigned the industrial classification while those further away are classified as rural vacant land under Minnesota Statutes 273.13 Classification of Property.

Each property classification has a legislatively set percentage called the class rate that is multiplied by  the property’s taxable market value (TMV) to calculate tax capacity. For payable 2016 taxes, the class rate for rural vacant land is 1.00 percent of the estimated market value.  For the industrial classification, there are two class rates: 1.50 percent for the first $150,000 of the TMV and 2.0 percent for the value over $150,000. 

Property taxes are calculated by multiplying a property’s tax capacity times the tax extension rate for the jurisdiction where it is located.  Tax extension rates are determined by county, local government and school district spending.  In St. Louis County within the mining area for taxes payable in 2016, they range from a low of approximately 82 percent to a high of approximately 414 percent.  In addition, the market value times the referendum rate must be added to the tax determined above if there is a referendum in the taxing district.  For industrial class property, the state general tax rate of 48.641 percent applies in addition to the local tax rate.

The following schedule provides for adjustments in both the valuations and classifications of auxiliary mining lands located on the iron formation versus off-formation lands as well as further refinements based on the proximity of these lands to active mining operations. It outlines valuation adjustments to be made on excess lands where they are located as market conditions and/or Minnesota statutes dictate (see below).

This schedule was updated based on market conditions for the 2013 assessment.

St. Louis County Mining Land Assessment Schedule

 

​Iron Formation Land Value ($/acre) ​Classification
​Land within 1/4 mile of active pit ​$1,000 ​Industrial
​Excess land (more than 1/4 mile from mining activity or outside 15-year pit limit

​Undisturbed

Same as other private land​ ​Rural vacant land or current use

​Disturbed

​Stockpiles

​75% of other private land ​Rural vacant land or current use

​Abandoned Pits

​50% of other private land ​Rural vacant land or current use
Off-formation Land
​Land within 1/4 mile of mining activity ​$700 ​Industrial
​Excess land

​Undisturbed

​Same as other private land ​Rural vacant land or current use

​Tailings Ponds

​Stockpiles

​75% of other private land

​Rural vacant land or current use

​Tailings Ponds

​30% of other private land ​Rural vacant land or current use