250 VALUATION, DEPRECIATION AND THE RATE-BASE
is based on actual profit and average life and that it bases the
assessment on a multiple of the profits rather than on the market
value of the mine.
Pennsylvania taxes its coal lands under the acts of 1841 and
1842 which require the taxation of “ every subject of taxation
at the actual value thereof.” The foot-acre method of assess-
ment was in general use until 19o7 when a big jump in value
was made. Appeal to the state courts resulted in decisions
which declared the ¢ foot-acre” and “ royalty ” methods un-
satisfactory and dependence is now placed mainly on recent
sales in the vicinity to determine the market value of a property.
Although fairly satisfactory for real estate appraisals this method
cannot be applied with equal success to lands whose coal deposits,
of indeterminate extent, in many instances give them value.
Further than this recent sales in the vicinity may be scarce and
the resulting standard of value because of this fact very un-
satisfactory.
Arizona and Colorado tax mining properties on the basis of
production.
Arizona divides mining properties into two general classes,
productive and non-productive. Productive properties include
those which yield net proceeds during the year, after deducting
cost of active operation, cost of transportation, cost of market-
ing, smelting and refining, and expenses for betterments and
repairs. The return of the capital cannot be considered as part
of the cost nor can the salaries of those not continuously en-
gaged in the enterprise within the state be included as an
element of expense. The assessed value is arbitrarily taken as
one-eighth of the gross value plus 4 times the net value of the
annual output plus the value of the surface improvements.
Non-producing mines are taxed in the same way as other real
property in the State.
Colorado determines the net proceeds by deducting the actual
cost of extraction, after eliminating unnecessary expenditures
and the actual cost of transportation to place of sale, from the
gross value of the annual production (the sum actually obtained
