SB 123 Increase Energy Minerals Severance Tax (raise severed energy minerals tax rates from four and one-half percent to eight percent of their taxable value.)
The South Dakota energy minerals severance tax is a tax imposed on the privilege of severing energy minerals in this state. The tax is imposed on the owners or operators of the energy minerals.1 Fifty percent of energy severance tax revenue is distributed to the county fifty percent to the state general fund.2
The Department of Revenue and Regulation administers the energy minerals severance tax. The tax is imposed when an energy mineral is sold, transported from the state, or consumed, whichever occurs first.
The revenue from energy mineral severance tax rate has increased from a low of $600,000 in 1999 to a 2012 high of $6.6 million.3 A rate increase to 8% represents a 78% increase from the current rate of 4.5%.
_______________________________1. LRC Issue Memo TAXATION 03-05 http://legis.state.sd.us/IssueMemos/IssueMemos/Im03-05.pdf 2. Source SDCL chapter 10-39A & 10-39B http://legis.state.sd.us/statutes/DisplayStatute.aspx?Type=Statute&Statute=10-39A-8 3. SD Department of Revenue Annual Reports 1996 through 2012. 1-31-13 Correction: 2012 high in severence tax was originally erroneously reported as $1.2 million (2002 high) and has been corrected to $6.6 million.