Wednesday, the special task force studying South Dakota’s competitiveness in wind energy development also requested an analysis of South Dakota’s various taxes and incentives that affect wind projects in comparison to those in neighboring states of Minnesota, North Dakota and Iowa.
And they asked for an update on the work of the South Dakota Energy Infrastructure Authority, which was created about six years ago but hasn’t been heard from much since.
The task force, chaired by Rep. Roger Solum, R-Watertown, has four legislators and seven other members. The next meeting is Sept. 7 at the Capitol. The Legislature passed a law in the 2011 session creating the task force.
Iberdrola Renewables director of state and local taxes Russ Nelson presented the task force with a quick overview Wednesday showing taxes on a $200 million project in each of the four states.
Sales and use taxes would run $5.7 million in South Dakota while they would cost $1 million in North Dakota, $1.4 million in Minnesota and $1.2 million in Iowa.
He said the South Dakota taxes would climb to $11.4 million starting in 2013 if there’s no replacement for the state’s refund program that is in place through Dec. 31, 2012.
Property taxes over a 20-year period would be $12.5 million in South Dakota, $10.5 million in North Dakota, $8.5 million in Minnesota and $10.1 million in Iowa, according to Nelson.
South Dakota’s one area of clear advantage is in income taxes. Those would be zero in South Dakota, $1.1 million in North Dakota, $1.7 million in Minnesota and $2.1 million in Iowa, he said.
“Income taxes are not the tail that wags our tax dog, and never will be,” Nelson told the panel.
Koenecke suggested that companies be invited to tell the task force what would motivate development by them in South Dakota.
“I think that would be very instructive for this group to take a look at,” he said.