Lithium tax heads to state Senate
The South Dakota House is advancing a proposal that designates lithium as a precious metal—like silver and gold.
The move comes as interest in mining lithium and other minerals in the Black Hills is increasing.
Hard rock lithium is contained in crystals that form in pegmatite rock. To mine pegmatites in South Dakota, an operator must obtain a permit—similar for those mining sand or gravel.
Companies from around the world have expressed interest in mining the Black Hills for lithium.
Republican Rep. Kirk Chaffee lives near Sturgis in the northern Black Hills. He said the move subjects lithium to a state severance tax of ten percent of net profits.
“By calling it ‘precious metals’—there’s actually provisions in the current statute that allows that. It’s taxed on the net profit of lithium,” Chaffee said. “So, wherever it is in that stage of production, it’s taxed on that dollar amount.”
Chaffee brought a bill last year to tax lithium. It failed in the Senate. He hopes paring lithium with two other designated precious metals will convince the Republican-controlled Senate.
A large majority of House lawmakers voted in favor of the idea. One lawmaker who voted against the proposal worries it incentivizes mining the Black Hills.
“I don’t believe we should be mining in the Black Hills, period," said Democratic Rep. Peri Pourier, who is Oglala Lakota. She worries about how mining will affect water quality in the Black Hills.
“Preserving it’s natural, original state is the most important thing we can do for the people of South Dakota, the Oceti Sakowin and for future generations coming up together."
The state Department of Revenue opposed the bill last session. This year they did not support or oppose the legislation.
The bill now heads to the Senate.