Lawmakers vote to cut taxes on gold mining
PIERRE -- South Dakota’s gold taxes might be reduced.
A proposal that would rewrite the existing laws received a slim endorsement Wednesday on a 4-3 vote from the Senate Taxation Committee.
The measure could face debate Tuesday by the full Senate.
The motivation is to help Wharf Resources. The company has 160 employees and a payroll of $150 million at its Lawrence County mine.
“It’s the last remaining surface gold mine in the Black Hills,” Sen. Bob Ewing, R-Spearfish, said. He is the prime sponsor of the bill, SB 162.
With gold currently at about $1,200 per ounce, Ewing said, “They’re in trouble.”
The current tax schedule has three parts.
There is a flat $4 tax per ounce. There is an additional $1 to $4 per ounce as prices exceed $500 to $800. The third piece is a 10 percent tax on the company’s net income.
The proposal coming before the Senate would keep the $4 flat tax, levy $2 per ounce if the price exceeds $800 and reduce the net-income tax to 8 percent.
Those changes would save the company an estimated $500,000 based on price and production forecasts for the coming tax year, according to company and state officials.
The company would pay about $2.5 million in 2015 under the new schedule.
Lobbyist Larry Mann said Wharf made approximately $58.5 million of net income in 2012. “That is the best year Wharf has had in 31 years,” he said. It dropped to $11 million in 2013.