10-39A ENERGY MINERALS SEVERANCE TAX
CHAPTER 10-39A

ENERGY MINERALS SEVERANCE TAX

10-39A-1      Severance tax imposed on energy minerals--Rate.
10-39A-1.1      Definition of terms.
10-39A-2      Taxable value based on sale price or market value--Governmental royalty interests deducted.
10-39A-2.1      Posted field price as taxable value.
10-39A-2.2      Uranium ore taxed on triuranium octa-oxide content.
10-39A-3      Collection and administration according to mineral severance tax procedures.
10-39A-3.1      Point of imposition of severance tax.
10-39A-4      Operator to be designated to file returns and pay tax--Tax withheld from owner--Designated operator.
10-39A-5      Quarterly filing of reports and remission of tax due--Forms--Violation as misdemeanor.
10-39A-6      Superseded.
10-39A-7      Severance tax in lieu of taxes other than sales, use, and property taxes.
10-39A-8      Division of tax proceeds between county and state.
10-39A-8.1, 10-39A-8.2. Repealed.
10-39A-9      Vouchers and warrants for payments to counties.
10-39A-10      County trust and agency account--Purposes for which proceeds used by counties.
10-39A-11      Prepayment of county share of tax.
10-39A-12      Prepayment to be voluntary--Compulsion as malfeasance.
10-39A-13      Prepayment limited to county portion of tax.
10-39A-14      Computation of tax due--Credit for tax prepaid.
10-39A-15      Superseded.
10-39A-16      Action by secretary for collection of delinquent taxes--Exemption from execution.
10-39A-17      Repealed.
10-39A-18      Inspection of books and records--Authority of secretary--Violation as misdemeanor.
10-39A-19      Inspection of books and records--Authority of county commissioner--Violation as misdemeanor.
10-39A-20      False statement under oath as perjury.
10-39A-21      Repealed.


10-39A-1 Severance tax imposed on energy minerals--Rate.
     10-39A-1.   Severance tax imposed on energy minerals--Rate. For the privilege of severing energy minerals in this state, there is imposed on the owner or operator of any energy mineral an excise tax, to be termed a "severance tax," equal to four and one-half percent of the taxable value of any energy minerals severed and saved by or for the owner or operator.

Source: SL 1977, ch 93, § 1; SL 1978, ch 81, § 1; SL 1979, ch 78, § 1; SL 2008, ch 37, § 94.


10-39A-1.1 Definition of terms.
     10-39A-1.1.   Definition of terms. Terms used in this chapter mean:
             (1)      "Energy minerals," any mineral fuel including coal, lignite, petroleum, oil, natural gas, uranium, and thorium and any combination of minerals used in the production of energy;
             (2)      "Market value," the price at which the property would change hands between a willing buyer and willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the facts;
             (3)      "Operator," a person who directly or physically severs minerals from the land;
             (4)      "Owner of interest" or "owner," an owner of a landowner's royalty, of an overriding royalty, or of profits and working interests, or any combination thereof. The term does not include an owner of federal, state, or local governmental royalty interest;
             (5)      "Sale price," the total consideration received in exchange for energy minerals;
             (6)      "Secretary," the secretary of the South Dakota Department of Revenue;
             (7)      "Severing," the mining, extracting, or producing of any energy minerals in South Dakota;
             (8)      "Severor," a person engaging in the business of severing energy minerals that the person owns or a person who is the owner of energy minerals and has another person performing the severing of such energy minerals, except that the term does not include the State of South Dakota or its political subdivisions.

Source: SL 1978, ch 81, § 2; SL 1979, ch 78, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2008, ch 37, § 95; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.


10-39A-2 Taxable value based on sale price or market value--Governmental royalty interests deducted...
     10-39A-2.   Taxable value based on sale price or market value--Governmental royalty interests deducted. Except as otherwise provided in this chapter, the taxable value of any energy mineral which has been sold is the sale price of such mineral less any rental or royalty payment belonging to the United States or the State of South Dakota or its political subdivisions and the taxable value of any severed and saved energy mineral which has not been sold is the market value of such mineral less any rental or royalty payment belonging to the United States or the State of South Dakota or its political subdivisions.

Source: SL 1977, ch 93, § 1; SL 1978, ch 81, § 4.


10-39A-2.1 Posted field price as taxable value.
     10-39A-2.1.   Posted field price as taxable value. When any energy mineral has a posted field price at the point of productions, the taxable value of such mineral is the posted field price.

Source: SL 1978, ch 81, § 5.


10-39A-2.2 Uranium ore taxed on triuranium octa-oxide content.
     10-39A-2.2.   Uranium ore taxed on triuranium octa-oxide content. The taxable value of severed and saved uranium-bearing material is the sales price per pound of the content of triuranium octa-oxide contained in the severed and saved uranium ore or processed yellow-cake concentrate, regardless of the form in which the product is actually disposed of. However, if the severed and saved uranium ore or processed uranium yellow-cake concentrate is not sold, the taxable value is the market value of the triuranium octa-oxide in such material.

Source: SL 1978, ch 81, § 6.


10-39A-3 Collection and administration according to mineral severance tax procedures.
     10-39A-3.   Collection and administration according to mineral severance tax procedures. The tax provided for in this chapter shall be collected and administered as provided in chapter 10-39. However, §§ 10-39-24 to 10-39-26, inclusive, §§ 10-39-28 to 10-39-31, inclusive and § 10-39-35 do not apply to the tax imposed by this chapter.

Source: SL 1977, ch 93, § 3; SL 2008, ch 37, § 96.


10-39A-3.1 Point of imposition of severance tax.
     10-39A-3.1.   Point of imposition of severance tax. An energy mineral is subject to the severance tax when it is sold or consumed, whichever occurs first.

Source: SL 1978, ch 81, § 7; SL 1991, ch 93.


10-39A-4 Operator to be designated to file returns and pay tax--Tax withheld from owner--Designated...
     10-39A-4.   Operator to be designated to file returns and pay tax--Tax withheld from owner--Designated operator. Each owner of interests in energy minerals produced from a single well or mine shall designate an operator to file all required returns and to pay the tax due under this chapter. The tax, subject to any provisions to the contrary in any written contract, lease, or other form of agreement, shall be withheld from distributions that would otherwise be made to each owner by the operator for payment to the state. If any owner of interests in energy minerals produced from a single well or mine fails to designate such an operator, then the person designated as operator by the owner of the working interest in the well or mine, or, if no such person has been designated, then the person holding the greatest portion of the working interest in such well or mine, is the designated operator for purposes of this section.

Source: SL 1977, ch 93, § 4; SL 1978, ch 81, § 8; SL 2008, ch 37, § 97.


10-39A-5 Quarterly filing of reports and remission of tax due--Forms--Violation as misdemeanor.
     10-39A-5.   Quarterly filing of reports and remission of tax due--Forms--Violation as misdemeanor. Within thirty days after the close of each quarter ending respectively on March thirty-first, June thirtieth, September thirtieth, and December thirty-first of each year, each owner of severed energy minerals or person designated to remit the tax on behalf of the owners shall file with the secretary of revenue under oath a report of the amount of energy minerals which became subject to the severance tax in the previous quarter and the amount of tax due under the provisions of this chapter and shall remit with such report the amount of tax thereof shown to be due. Any report made shall be on forms and in accordance with rules promulgated by the secretary of revenue pursuant to chapter 1-26. A violation of this section is a Class 1 misdemeanor.

Source: SL 1977, ch 93, § 2; SL 1978, ch 81, § 9; SL 1987, ch 82, § 17; SL 1992, ch 158, § 3; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.


10-39A-6
     10-39A-6.   Superseded.


10-39A-7 Severance tax in lieu of taxes other than sales, use, and property taxes.
     10-39A-7.   Severance tax in lieu of taxes other than sales, use, and property taxes. This tax is in lieu of the tax provided in § 10-39-24 and in lieu of all other occupational, excise, income, privilege, franchise taxes, and any other mineral taxes levied by the State of South Dakota, but is not in lieu of sales, use, and property taxes.

Source: SL 1977, ch 93, § 1; SL 2008, ch 37, § 98.


10-39A-8 Division of tax proceeds between county and state.
     10-39A-8.   Division of tax proceeds between county and state. All taxes, interest and penalties imposed and collected by the secretary of revenue under this chapter shall be distributed as follows:
             (1)      One-half shall be returned to the county in which the energy minerals or mineral products were severed;
             (2)      One-half share shall be paid into the state treasury and credited to the general fund.

Source: SL 1978, ch 81, §§ 11, 12; SL 1979, ch 77, §§ 4, 5; SL 1981, ch 96; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2007, ch 28, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.


10-39A-8.1
     10-39A-8.1, 10-39A-8.2.   Repealed by SL 2007, ch 28, §§ 2, 3.


10-39A-9 Vouchers and warrants for payments to counties.
     10-39A-9.   Vouchers and warrants for payments to counties. Funds paid to counties under this chapter shall be paid out on warrants drawn by the state auditor on vouchers approved by the director of the Office of Economic Development or his designee.

Source: SL 1978, ch 81, § 13; SL 1979, ch 77, § 2.


10-39A-10 County trust and agency account--Purposes for which proceeds used by counties.
     10-39A-10.   County trust and agency account--Purposes for which proceeds used by counties. Upon receipt of any funds paid to a county under the provisions of this chapter, the county treasurer shall deposit the funds in a trust and agency account. The county auditor shall at the direction of the board of county commissioners, allocate the funds to be distributed by the county treasurer for school and road purposes to offset social, economic, or physical impacts, either direct or indirect, resulting from energy development or production in the county.

Source: SL 1978, ch 81, § 14; SL 1979, ch 77, § 3.


10-39A-11 Prepayment of county share of tax.
     10-39A-11.   Prepayment of county share of tax. Any person or corporation intending to mine or extract minerals may, upon the request of the board of county commissioners of the county in which the mine or extraction of minerals is to occur, prepay an amount equal to five times the county share of the estimated severance tax which would be due the year the mine or mineral extraction facility is at peak production.

Source: SL 1980, ch 88, § 1.


10-39A-12 Prepayment to be voluntary--Compulsion as malfeasance.
     10-39A-12.   Prepayment to be voluntary--Compulsion as malfeasance. Nothing in §§ 10-39A-11 to 10-39A-14, inclusive, obligates any person or corporation to prepay a severance tax except under voluntary agreement. Any action by a county commissioner or any other public official to compel involuntary prepayment of severance tax constitutes malfeasance of office.

Source: SL 1980, ch 88, § 2; SL 2008, ch 37, § 100.


10-39A-13 Prepayment limited to county portion of tax.
     10-39A-13.   Prepayment limited to county portion of tax. No agreement for prepayment of severance tax may involve funds other than those to be returned to a county under the provisions of subdivision 10-39A-8(1).

Source: SL 1980, ch 88, § 2; SL 2008, ch 37, § 101.


10-39A-14 Computation of tax due--Credit for tax prepaid.
     10-39A-14.   Computation of tax due--Credit for tax prepaid. If a mineral subject to the severance tax is mined or extracted, the severance tax obligation shall be computed, in accordance with this chapter except that the prepaid severance tax shall be credited against the county share of the severance tax pursuant to subdivision 10-39A-8(1) which the person or corporation would have paid without a prepayment agreement. The tax credit shall cease when the amount of prepaid severance tax is equal to the county apportionment of severance tax due without a prepayment agreement.

Source: SL 1980, ch 88, § 3.


10-39A-15
     10-39A-15.   Superseded.


10-39A-16 Action by secretary for collection of delinquent taxes--Exemption from execution.
     10-39A-16.   Action by secretary for collection of delinquent taxes--Exemption from execution. All delinquent taxes imposed by this chapter shall constitute a debt due to the State of South Dakota and may be collected by action brought by the secretary in the name of the state against the delinquent tax debtor in any court of competent jurisdiction. No exemptions from the execution of a judgment so obtained may be permitted except those made absolute by the exemption laws of this state.

Source: SL 1982, ch 100, § 2.


10-39A-17
     10-39A-17.   Repealed by SL 2017, ch 66, § 5.


10-39A-18 Inspection of books and records--Authority of secretary--Violation as misdemeanor.
     10-39A-18.   Inspection of books and records--Authority of secretary--Violation as misdemeanor. The secretary may inspect or examine any books, waybills, inventories, correspondence, and memoranda relating to or used in the transaction of the business of a person subject to the tax imposed by this chapter. It is a Class 1 misdemeanor for any person having charge, control, or possession of those papers, books, or records to neglect or refuse the secretary full and free access to any books, papers, or records that he requires for the purposes of this chapter.

Source: SL 1982, ch 100, § 4.


10-39A-19 Inspection of books and records--Authority of county commissioner--Violation as misdemeano...
     10-39A-19.   Inspection of books and records--Authority of county commissioner--Violation as misdemeanor. The board of county commissioners of the affected county may inspect or examine any books, waybills, inventories, correspondence, and memoranda relating to or used in the transaction of the business of a person subject to the tax imposed by this chapter and severing energy minerals within that county. It is a Class 1 misdemeanor for any person having charge, control, or possession of those papers, books, or records to neglect or refuse the board full and free access to any books, papers, or records that it requires pursuant to this section.

Source: SL 1982, ch 100, § 4A.


10-39A-20 False statement under oath as perjury.
     10-39A-20.   False statement under oath as perjury. Any person, required by this chapter to make or file a statement or to verify it under oath, who intentionally makes or verifies under oath a false statement is guilty of perjury with punishment, upon conviction, as provided by law.

Source: SL 1982, ch 100, § 5.


10-39A-21
     10-39A-21.   Repealed by SL 1992, ch 158, § 4.