Tax revenue generated from wind energy projects move South Dakota forward

Release Date: 

12/11/2018

Contact(s): 

Lu Nelsen, policy associate, lucasn@cfra.org, 402.687.2100 ext. 1022; or Rhea Landholm, brand marketing and communications manager, rheal@cfra.org, 402.687.2100 ext 1025

LYONS, NEBRASKA – Wind energy projects in South Dakota power more than 30 percent of the state’s energy needs while generating tax revenue for local schools and roads. A fact sheet released today by the Center for Rural Affairs analyzes the tax collection structure for wind energy generation in the state.

“Many people wonder what their community will get out of wind development,” said Lu Nelsen, policy associate at the Center for Rural Affairs and author of the publication. “New tax revenue from a wind farm is something that benefits an entire community.”

“Fact sheet: South Dakota wind energy tax revenue” highlights tax contributions through nameplate capacity and production taxes. The state uses a combination of these two taxes to collect revenue from wind energy projects.

While much of this revenue remains in the county, legislation passed in 2016 decreases the portion given to local school districts over 10 years. The local school district would keep all of its share for the first five years, but starting in year six, the amount would decrease by 20 percent. In year 10, the revenue would be redistributed statewide instead.

“As South Dakotans move toward a renewable future, it’s essential to determine how to keep these benefits local,” Nelsen said. “This ensures communities can make use of new revenue generated by projects.”

For more information and to view the fact sheet, visit cfra.org/publications/WindEnergyTaxRevenueSD.