<html> <head> <title>Rule 64:27:01:16 Limitations of deductions.</title> <META NAME="Keywords" Content="Administrative Rules 64:27:01:16"> <META NAME="Description" Content="Administrative Rules 64:27:01:16 Limitations of deductions."> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Originator content="Microsoft Word 10"> <style> <!-- --> </style> </head> <body lang=EN-US> <div> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>64:27:01:16.&nbsp;&nbsp;Limitations of deductions.</b> Deductions allowed in SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=10-39-45.2">10-39-45.2(6)</A> are limited to expenditures incurred in production activities in this state.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b>SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=10-39-49">10-39-49.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b>SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=10-39-45.2">10-39-45.2(6).</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Declaratory Ruling:</b> The formula for determining net profit for mineral extraction tax on profit of minerals extracted in-state and shipped out-of-state for processing, where N = net profit, G = total gross yield, AS = in-state administrative costs and salaries, TS = South Dakota state and local taxes, CS = allowable costs incurred in-state, CO = allowable costs incurred out-of-state, and GS = gross yield from South Dakota minerals, is as follows:</p> <p>&nbsp;N = GS - (AS + TS + CS) - CO&nbsp; x <b>&nbsp;</b><u>GS </u></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; G </p> <p>Secretary of Revenue Declaratory Ruling No. 77-9.</p> </div> </body> </html>