CHAPTER 10-37
TAXATION OF PIPELINE COMPANIES
10-37-1 Common carriers subject to tax.
10-37-2 Pipeline company defined.
10-37-2.1 Classification for taxation purposes of property used for transporting water by pipelines for carrying energy, minerals or production of synthetic fuels--Property used to deliver water for domestic or municipal use exempt from taxation.
10-37-3 Annual statement required of pipeline companies--Date of filing--Contents.
10-37-4 Statement required annually as to real estate owned or used.
10-37-5 Additional information required by secretary.
10-37-6 Accounting rules prescribed by department.
10-37-7 Information used by department on failure of company to file valid report--Penalty addition to valuation.
10-37-8 Property subject to assessment--Earnings and other evidence considered.
10-37-9 Determination and transmittal to county auditors of property valuations within taxing districts--Taxation as other property.
10-37-9.1 Determining fair market value of pipeline company property.
10-37-10 County commissioners' allocation of assessed valuation to taxing districts--Notice to company.
10-37-11 Map of lines filed with county auditor--Use in allocating valuation to taxing districts.
10-37-12 Assessment of private pipelines--Annual statement by owner.
10-37-13 Determination and transmittal to county auditors of private pipeline assessments within taxing districts--Taxation as other property.
10-37-14 Local assessment of oil company property other than pipelines.
10-37-15 Collection of delinquent taxes--Action in circuit court.
10-37-16 Exemption of gas companies otherwise taxed.
10-37-1. Common carriers subject to tax.
Every person, copartnership, association, limited liability company, corporation, or syndicate engaged in the business of transporting or transmitting gas, gasoline, oils, carbon dioxide, or motor fuels by means of pipelines as a common carrier, whether such pipelines be owned or leased, shall be taxed as herein provided.
Source: SL 1947, ch 413, § 1; SDC Supp 1960, § 57.19A01; SL 1994, ch 351, § 18; SL 2022, ch 32, § 1.
10-37-2. Pipeline company defined.
The term, pipeline company, as used in this chapter, means a person, partnership, association, limited liability company, corporation, joint venture, or syndicate that may own or operate or be engaged in operating or utilizing pipelines for the purposes described in § 10-37-1 or 46A-1-72.
Source: SL 1947, ch 413, § 2; SDC Supp 1960, § 57.19A02; SL 1981 (2d SS), ch 1, § 26; SL 1984, ch 12, § 6; SL 1994, ch 351, § 19.
10-37-2.1. Classification for taxation purposes of property used for transporting water by pipelines for carrying energy, minerals or production of synthetic fuels--Property used to deliver water for domestic or municipal use exempt from taxation.
The property of every person, partnership, association, limited liability company, corporation, joint venture, or syndicate used in the business of transporting or transmitting water by pipelines for use as a medium for carrying coal or other energy minerals, as that term is defined in § 10-39A-1.1, for use in the extraction or refining of energy minerals, or for use in the production of synthetic fuels, whether such pipelines are owned or leased, is hereby specifically classified for taxation purposes and shall be taxed as provided in this chapter on the portion of the pipeline company's property that is actually used for the foregoing purposes. The proportional share of a pipeline company's property that is used to deliver water for domestic or municipal use in this state is exempt from ad valorem taxation.
Source: SL 1981 (2d SS), ch 1, § 25; SL 1994, ch 351, § 20.
10-37-3. Annual statement required of pipeline companies--Date of filing--Contents.
Any pipeline company having lines in this state shall annually, on or before April fifteenth of each year, make out and deliver to the Department of Revenue a statement, verified by the oath of an officer or agent of such pipeline company making such statement, showing in detail for the year ended December thirty-first next preceding:
(1) The name of the company;
(2) The nature of the company, whether a person or persons, an association, copartnership, corporation or syndicate, and under the laws of what state organized;
(3) The location of its principal office or place of business;
(4) The name and post office address of the president, secretary, auditor, treasurer, and superintendent or general manager;
(5) The name and post office address of the chief officer or managing agent in this state;
(6) The whole number of miles of pipeline owned, operated, or leased within the state, including a classification of the size, kind, and weight thereof, separated, so as to show the mileage in each county, and each lesser taxing district;
(7) A full and complete statement of the cost and actual present value of all buildings of every description owned by said pipeline company within the state and each lesser taxing district, not otherwise assessed;
(8) The number, location, size, and cost of each pressure pump or station;
(9) Any and all other property owned by said pipeline company within the state which property shall be classified and scheduled in such a manner as the secretary of revenue may by rule promulgated pursuant to chapter 1-26 require;
(10) The gross earnings of the entire company, and the gross earnings on business done within this state;
(11) The operating expenses of the entire company and the operating expenses within this state; and
(12) The net earnings of the entire company and the net earnings within this state.
Source: SL 1947, ch 413, § 3; SDC Supp 1960, § 57.19A03; SL 1987, ch 82, § 12; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2024, ch 189, § 3, rejected Nov. 5, 2024.
10-37-4. Statement required annually as to real estate owned or used.
Every pipeline company required by law to report to the Department of Revenue under the provisions of this chapter shall, on or before April fifteenth in each year make to the Department of Revenue, a detailed statement showing the amount of real estate owned or used by it on December thirty-first next preceding for pipeline purposes, the county in which said real estate is situated, including the rights-of-way, pumping or station grounds, buildings, storage or tank yards, equipment grounds for any and all purposes, with the estimated actual value thereof, in such manner as may be required by the secretary of revenue.
Source: SL 1947, ch 413, § 4; SDC Supp 1960, § 57.19A04; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-5. Additional information required by secretary.
The secretary of revenue may demand, in writing, detailed, explanatory and amended statements of any of the items mentioned in §§ 10-37-3 and 10-37-4 or any other item deemed to be important, to be furnished it by such pipeline company within thirty days from such demand in such form as the secretary of revenue may designate, which shall be verified as required for the original statement. The returns, both original and amended, shall show such other facts as the secretary of revenue, in writing, shall require.
Source: SL 1947, ch 413, § 7; SDC Supp 1960, § 57.19A07; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-6. Accounting rules prescribed by department.
The secretary of revenue may promulgate rules concerning the keeping of accounts by the pipeline companies doing business or having property in this state to ensure the accurate division of the accounts and the information to be reported and uniformity in reporting to the Department of Revenue.
Source: SL 1947, ch 413, § 5; SDC Supp 1960, § 57.19A05; SL 1987, ch 82, § 13; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-7. Information used by department on failure of company to file valid report--Penalty addition to valuation.
If any pipeline company fails or refuses to obey and conform to the rules, method and requirements prescribed by the Department of Revenue under the provisions of this chapter, or to make the reports required by §§ 10-37-3 and 10-37-4, the Department of Revenue shall assess the property of such pipeline company according to the best information obtainable, and shall then add to its valuation of such pipeline company twenty-five percent thereof, which valuation and penalty shall be separately shown, and together shall constitute the assessment for that year.
Source: SL 1947, ch 413, § 6; SDC Supp 1960, § 57.19A06; SL 1987, ch 82, § 14; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-8. Property subject to assessment--Earnings and other evidence considered.
The property shall be valued at its fair market value, and the assessment shall be made upon the fair market value of the entire pipeline property within the state and shall include the rights-of-way, easements, the pipelines, stations, grounds, shops, buildings, pumps and all other property, real and personal, exclusively used in the operation of the pipeline. In assessing any pipeline company and its equipment, the Department of Revenue shall take into consideration the gross earnings and the net earnings for the entire property, and per mile, for the year ending December thirty-first preceding, and any and all other matters necessary to enable the department to make a just and equitable assessment of pipeline property.
Source: SL 1947, ch 413, § 8; SDC Supp 1960, § 57.19A08; SL 1989, ch 87, § 13; SL 1997, ch 61, § 9; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-9. Determination and transmittal to county auditors of property valuations within taxing districts--Taxation as other property.
The Department of Revenue shall on the fifth day of July of each year determine the true and actual value of pipeline property located in each taxing district of the state, and in fixing said value shall take into consideration the structures, equipment, pumping stations, etc., located in said taxing district, and shall transmit to the county auditor of each such county through and into which any pipeline may extend, a statement showing the assessed value of said property in each of the taxing districts of said county. The said property shall then be taxed in said county and lesser taxing districts, based upon the valuation so certified, in the same manner as other property is taxed.
Source: SL 1947, ch 413, § 9; SDC Supp 1960, § 57.19A09; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-9.1. Determining fair market value of pipeline company property.
For the purpose of determining the fair market value of the property of any pipeline company, the Department of Revenue shall take into consideration the cost approach, the market approach, and the income approach to appraisal. In the market approach, the department shall consider the actual or market value of the shares of stock outstanding, the actual or market value of all bonds outstanding, and all other indebtedness as may be applicable for operating the company. In the income approach, the department may consider the company's growth rate and the rate of inflation in determining the capitalization rate. The Department of Revenue may take into consideration any other information or data of any kind or nature which the department may deem material in arriving at the fair market value of the property.
Source: SL 1996, ch 77, § 10; SL 1997, ch 61, § 10; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-10. County commissioners' allocation of assessed valuation to taxing districts--Notice to company.
It shall be the duty of the county auditor, after receiving said statement from the Department of Revenue setting forth the valuation as finally equalized of any pipeline company owning and operating a pipeline in his respective county, to turn such statement over to the board of county commissioners, who at its first meeting after receiving such statement, shall make and enter in the proper record an order stating and declaring the length of such pipeline or lines of each pipeline company running through or extending into each township or lesser taxing district of such county, together with the valuation as certified by the Department of Revenue, which shall constitute the assessed valuation of said property for taxing purposes; and the taxes on said property when collected by the county treasurer, shall be disposed of as other taxes. The county auditor of such county shall within three days after the making of such order transmit a copy of the same to the secretary or accounting officer of such company.
Source: SL 1947, ch 413, § 10; SDC Supp 1960, § 57.19A10; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-11. Map of lines filed with county auditor--Use in allocating valuation to taxing districts.
Every pipeline company shall keep on file in the office of the Department of Revenue and the county auditor of each county through or into which its line or lines run, a map or blueprint showing clearly the location of its line or lines in such county and giving the length of the same in each governmental subdivision thereof, and the same shall be used by the county commissioners in determining the length of line and valuation in each township or lesser taxing district, as provided for in § 10-37-10.
Source: SL 1947, ch 413, § 11; SDC Supp 1960, § 57.19A11; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-12. Assessment of private pipelines--Annual statement by owner.
The Department of Revenue shall also determine and fix the value for tax purposes of any private pipeline owned and operated by any oil company or carbon dioxide capture company and extending into or through two or more counties of this state up to, but not including, any property located upon land upon which is operated any pipeline terminal or pump station. The owner of such pipeline shall, at the time provided in § 10-37-3, make a return to the Department of Revenue of the information required under subdivisions (1) to (6)(both inclusive) of said section together with a statement of the value of said pipeline in each county or each lesser taxing district in this state.
Source: SL 1947, ch 413, § 12; SDC Supp 1960, § 57.19A12; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2022, ch 32, § 2.
10-37-13. Determination and transmittal to county auditors of private pipeline assessments within taxing districts--Taxation as other property.
The Department of Revenue shall determine the true and actual value of the pipeline referred to in § 10-37-12 in each taxing district of the state and shall transmit to the county auditor of each county through or into which each pipeline extends a statement showing the assessed value of said pipeline in each of the taxing districts of said county, equalized on a uniform basis with the assessments of real estate in said county; and said property shall then be taxed in the same manner as provided in § 10-37-10 for the property of pipeline companies.
Source: SL 1947, ch 413, § 12; SDC Supp 1960, § 57.19A12; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-37-14. Local assessment of oil company property other than pipelines.
All other property of oil companies or carbon dioxide capture companies described in § 10-37-12, other than pipeline up to the line of any terminal or pumping station premises, including real estate and all buildings, facilities, or equipment thereon shall be assessed for taxation by the director of equalization in the taxing district in which the same is located.
Source: SL 1947, ch 413, § 12; SDC Supp 1960, § 57.19A12; SL 2022, ch 32, § 3.
10-37-15. Collection of delinquent taxes--Action in circuit court.
All laws relating to the enforcement of the payment of delinquent taxes shall be applicable to all taxes levied under the provisions of this chapter. When any tax levied under the provisions of this chapter shall become delinquent, the county treasurer having control of such delinquent taxes may proceed to collect the same in the manner as now provided for the collection of other taxes and with the same right and power of the sheriff under execution, except that no process shall be necessary to authorize him to sell any property belonging to any pipeline company for the collection of such taxes. The additional remedy provided for in § 10-38-10 by action in the circuit court shall also be available to the county treasurer.
Source: SL 1947, ch 413, § 13; SDC Supp 1960, § 57.19A13.
10-37-16. Exemption of gas companies otherwise taxed.
The provisions of this chapter shall not apply to any gas company distributing or transmitting natural or artificial gas otherwise assessed and taxed as a public utility company.
Source: SL 1947, ch 413, § 14; SDC Supp 1960, § 57.19A14.
