<html xmlns="http://www.w3.org/1999/xhtml"><head><meta charset="UTF-8" /><meta http-equiv='content-language' content='en-us'/><title>SDLRC - Codified Law 10-39-45.2 - Deductions for determining net profit. </title><meta name="Generator" content="PowerTools for Open XML" /><style>span { white-space: pre-wrap; } p.s2038477Normal { text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2038477SENU { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2038477CL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } p.s2038477Normal-000000 { text-indent: 0.50in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2038477DefaultParagraphFont { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2038477Normal-000001 { margin-left: 0.70in; text-indent: -0.45in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-right: 0; margin-bottom: .001pt; } span.s2038477DefaultParagraphFont-000002 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } p.s2038477Normal-000003 { text-indent: 0.25in; text-align: justify; font-family: 'Times New Roman', 'serif'; font-size: 12pt; line-height: 108%; margin-top: 0; margin-left: 0; margin-right: 0; margin-bottom: .001pt; } span.s2038477000004 { font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } span.s2038477SCL { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: bold; margin: 0; padding: 0; } span.s2038477SCL-000005 { font-family: 'Times New Roman', 'serif'; font-size: 12pt; font-style: normal; font-weight: normal; margin: 0; padding: 0; } body { text-decoration-skip-ink: none; } </style></head><body><div><p dir="ltr" class="s2038477Normal"><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=10-39-45.2"><span class="s2038477SENU">10-39-45.2</span></a><span xml:space="preserve" class="s2038477SENU">. </span><span class="s2038477CL">Deductions for determining net profit.</span></p><p dir="ltr" class="s2038477Normal-000000"><span xml:space="preserve" class="s2038477DefaultParagraphFont">Net profits shall be determined by subtracting from the gross yield, as defined by § </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=10-39-44"><span class="s2038477DefaultParagraphFont">10-39-44</span></a><span class="s2038477DefaultParagraphFont">, the following deductions for costs paid or incurred during the period for which the tax is paid:</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(1)    The cost of extracting the precious metals;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(2)    The cost of transporting the precious metals from the mines to the place or places of reduction, refining, and sale;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(3)    The cost of reduction, refining, and sale;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(4)    The cost of marketing and delivering the products and the conversion of the products into money;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(5)    The cost of maintenance and repairs of all mine machinery, equipment, apparatus, and facilities; all milling, smelting, and reduction works, plants, and facilities; all transportation facilities and equipment; and general administrative buildings and facilities within the State of South Dakota;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(6)    All interest costs and all insurance costs paid or accrued on the machinery, equipment, apparatus, works, plants, and facilities, including moneys expended for industrial insurance or workers' compensation, the actual cost of hospital and medical attention, accident benefits, group insurance, pensions, recreation, and payments into pension and profit</span><span class="s2038477DefaultParagraphFont-000002">-</span><span class="s2038477DefaultParagraphFont">sharing trusts and employee welfare;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(7)    Depreciation on the cost of the machinery, equipment, apparatus, works, plants, and facilities mentioned in subdivision (5) of this section at the same rates allowable for federal income tax purposes;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(8)    The cost of development and exploration work in or about the mine or upon a group of mines when operated as a unit;</span></p><p dir="ltr" class="s2038477Normal-000001"><span xml:space="preserve" class="s2038477DefaultParagraphFont">(9)    The cost of reclamation pursuant to chapter </span><a href="https://sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&amp;Statute=45-6B"><span class="s2038477DefaultParagraphFont">45-6B</span></a><span class="s2038477DefaultParagraphFont">;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(10)    The cost of royalty payments;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(11)    All state and local taxes;</span></p><p dir="ltr" class="s2038477Normal-000001"><span class="s2038477DefaultParagraphFont">(12)    General administrative expense in connection with mining or extracting and milling operations incurred within the State of South Dakota.</span></p><p dir="ltr" class="s2038477Normal-000003"><span class="s2038477DefaultParagraphFont">Such deductions do not include general administrative costs or salaries incurred outside the State of South Dakota.</span></p><p dir="ltr" class="s2038477Normal"><span xml:space="preserve" class="s2038477000004"> </span></p><p dir="ltr" class="s2038477Normal"><span class="s2038477SCL">Source:</span><span xml:space="preserve" class="s2038477SCL-000005"> SL 1984, ch 78, § 3.</span></p></div></body></html>