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Senate endorses wind energy incentivesPIERRE, S.D. (AP)--The state Senate has approved Gov. Mike Rounds' plan to encourage construction of more wind farms in South Dakota. Senators unanimously approved a bill Feb. 26 that would improve tax incentives for the construction of wind turbines. The bill was passed by the House, which now will consider a change made by the Senate. HB1320 would cut property taxes by basing them on a wind farm's generation capacity. It also would add a new state tax on a wind farm's gross receipts, and companies that build wind towers could get refunds of the gross receipts tax to help build transmission lines and other facilities. Sen. Tom Dempster, R-Sioux Falls, said the current tax structure is flawed because it taxes wind projects before construction is finished. That means other states have tax structures that are more attractive than South Dakota's tax system, he said. "Let's not have our wind facilities pay these taxes up front. Let's have them pay their taxes once a facility is built," Dempster said. A wind turbine costs about $2 million, of which 40 percent is currently subject to property taxes. Instead of basing the property tax on the construction cost, the bill would impose a tax of $3 for each kilowatt a wind farm can produce. The measure also would impose a new state tax of 2 percent of the wind farm's gross receipts, calculated on the operation's energy production and the price of electricity. Companies could apply for refunds of up to 90 percent of their gross receipts payments in the first five years to help build transmission lines and other facilities. In the second five years, refunds would be limited to 50 percent of tax payments. The gross receipts tax also could be used to reimburse counties and school districts for lost revenue due to the reduction in property taxes on wind towers. 3/10/08 Date: 3/4/08 Advertisement
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