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SD Senate OKs change in co-ops' electricity taxes

PIERRE -- Taxes paid by rural electric cooperatives in South Dakota wouldn't vary as prices shift up and down, but instead would be based solely on the kilowatt-hours of electricity delivered, under changes that received final approval Monday from the Legislature.

The Senate voted 31-2 to agree with the House version of the legislation. Senate Bill 123 now heads to the governor for his decision whether to sign it into law.

The amendment adopted in the House of Representatives changes the payment schedule so that school districts would receive an additional payment of taxes during the first year of the new system.

Sen. Larry Rhoden, R-Union Center, said the double payment reflects the rural co-ops' continued interest in the financial welfare of public schools.

For more than 60 years, electric co-ops have been paying a gross receipts tax rather than property taxes for support of schools. Co-ops want the change to a kilowatt-hours approach in order to hold down the tax increases they must pass along to members.

The cost of electricity has increased to pay for additional equipment necessary to meet federal air-quality regulations.