39-14-603. Imposition.

(a) Taxable event. The following shall apply:

(i) There is levied a severance tax on the value of the gross product for the privilege of severing or extracting sand and gravel in the state. The severance tax imposed by this article may be in addition to other taxes, including but not limited to the ad valorem taxes imposed by W.S. 39-13-104.

(b) Basis of tax (valuation). The following shall apply:

(i) Sand and gravel shall be valued for taxation as provided in this subsection. For purposes of this subsection, the term "sand and gravel" includes aggregates used in construction. Based upon the information received or procured pursuant to W.S. 39-14-607(a)(i) or 39-14-608(a)(i), the department shall annually value the gross product for the preceding calendar year, in appropriate unit measures of all mines and mining claims from which valuable deposits are produced, at the fair market value of the product at the mouth of the pit or quarry where produced, after the mining or production process is completed;

(ii) In the event the sand and gravel are sold at the mouth of the pit or quarry without further movement or processing, the fair market value shall be the price established by bona fide arms-length sale less exempt royalty;

(iii) In the event the sand and gravel are not sold at the mouth of the pit or quarry by a bona fide arms-length sale, or, except as otherwise provided, if the product of the pit or quarry is used without sale, the department shall determine the fair market value of sand and gravel in accordance with paragraph (iv) or (v) of this subsection;

(iv) For sand and gravel sold away from the mouth of the mine pursuant to a bona fide arms-length sale the department shall calculate the fair market value by multiplying the sales value of the sand and gravel less exempt royalties by twenty-five hundredths (0.25);

(v) For sand and gravel used without sale or not sold pursuant to a bona fide arms-length agreement the fair market value shall be the fair market value of sand and gravel which is comparable in quality, quantity, terms and conditions under which the sand and gravel is being used or sold;

(vi) The value of the gross product shall be the fair market value of the product at the mouth of the mine where produced, after the mining or production process is completed;

(vii) Except as otherwise provided, the mining or production process is deemed completed when the mineral product reaches the mouth of the mine. In no event shall the value of the mineral product include any processing functions or operations regardless of where the processing is performed;

(viii) Except as otherwise provided, if the product as provided in paragraph (vii) of this subsection is sold at the mouth of the mine, the fair market value shall be deemed to be the price established by bona fide arms-length sale.

(c) Taxpayer. The following shall apply:

(i) In the case of the gross product of all mines and mining claims produced under lease, the lessor is liable for the of ad valorem taxes on the product removed only to the extent of the lessor's retained interest under the lease, whether royalty or otherwise, and the lessee or his assignee is liable for all other property taxes due on production under the lease;

(ii) Any taxpayer paying the taxes imposed by this article on any valuable deposit may deduct the severance taxes paid from any amounts due or to become due to the interest owners of such valuable deposit in proportion to the interest ownership;

(iii) Any person extracting valuable products subject to this article and any person owning an interest in the valuable products to the extent of their interest ownership are liable for the payment of the severance taxes imposed by this article together with any penalties and interest.