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A new South Dakota law that goes into effect July 1 will provide tax incentives for wind energy facilities and transmission lines. “South Dakota is committed to its role as a leader in the energy industry,” Gov. Mike Rounds said. “By making our business climate friendlier for those in the wind industry, we are optimistic that we’ll see continued growth in this area.” The legislation offers an incentive for the building of transmission lines and infrastructure. The new law has a two-part alternate tax: a nameplate capacity tax and a gross receipts tax. The nameplate tax is $3 multiplied by the nameplate capacity of the total wind farm, in kilowatts. The gross receipts tax is 2 percent of the wind farm’s actual production of electricity multiplied by an established rate of 4.75 cents per kilowatt hour. All of the nameplate tax and 20 percent of the gross receipts tax go to local governments and don’t count against property tax counts. Each local government gets the same percentage of the tax as it would receive if the revenue were agricultural property tax. The remaining 80 percent of the gross receipts tax goes to the property tax reduction fund. The maximum amount of the total rebate is 50 percent of the cost for transmission lines and a collector system for a wind farm or the cost for transmission lines to a new coal-fired power plant. The rebate lasts up to 10 years and can’t be more than 90 percent of gross receipts taxes for the first five years and 50 percent for the next five years. “We’re very excited about the energy solutions that this will create,” secretary Richard Benda of the department of tourism and state development said. “And we pledge to continue to further expand our state’s wind energy economy.”
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