PIERRE, S.D. - The company planning to build an oil pipeline across western South Dakota said it would lose an estimated $38 million in tax incentives under a bill approved by state lawmakers on Feb. 18.
The bill would change state law so oil pipelines would no longer be exempt from sales and excise taxes. It would apply to the TransCanada Keystone XL pipeline, which will carry crude oil from Canada to refineries in Texas.
Committee debate on the bill came just hours before the state Public Utilities Commission was to act on a construction permit for the $900 million pipeline project across seven South Dakota counties.
Bill sponsor Rep. Jason Frerichs, D-Wilmot, said once the pipeline is in the ground the state will get few benefits in terms of new jobs or other economic activity. He said incentives such as tax refunds should go to projects that bring long-lasting benefits, and that the tax revenue from the Keystone project would help the state balance its budget.
Dennis Duncan, a lobbyist for TransCanada, pointed out that the company would be paying $20 million in property taxes annually on the pipeline, and said the bill could damage the state's image as pro-business and tax friendly.
"It's clearly dangerous to change the rules in midstream after you've attracted businesses to the state," Duncan said.
No comments:
Post a Comment