County could benefit from tax rebate program on livestock-related projects

Shannon Marvel

Brown County commissioners are optimistic about two sales and use tax rebate programs offered by the Governor’s Office of Economic Development meant to incentivize livestock production.

That’s because they could result in more money in county coffers.

Scott Amundson and Kyle Peters with the governor’s office were at the July 2 commission meeting at the courthouse to give county officials an overview of how the tax rebate programs work and how they could help economic development in the county.

Two existing programs that were created in 2013 have been tweaked to allow the sales and use tax collected by the state on some livestock development projects to be sent to counties.

There are no restrictions on the money, according to a handout issued during the commission meeting. Counties can use the funds to repair roads, better fund the sheriff’s department or any other way they see fit.

South Dakota’s sales and use tax is 4.5%. So theoretically on a $1 million project, the county could get $45,000.

Historically, the Reinvestment Payment and South Dakota Jobs programs have been used for manufacturing and wind energy ventures, Amundson said.

Now, livestock development projects such as animal feedlots that require a conditional use permit from a county qualify, too.

“Twenty-two of the 66 counties do not have zoning, so those 22 counties will not participate,” Amundson said.

“If the county doesn’t need a conditional use permit, it doesn’t fall into that bucket. (Otherwise) once the project is complete the county receives these tax dollars with no strings attached,” he said.

Amundson said the tax inventive programs as they pertain to livestock development are in the beginning stages.

“We’ve only got three or four applications started. Some counties find it a good fit and some don’t,” he said.

Commission Vice Chairwoman Rachel Kippley said she thinks the programs are a great idea, but wondered how the state will ensure that counties are approving conditional use permits for the right reasons.

“Has the concern ever been raised that because of this program they might approve something they shouldn’t have because of the incentives?” Kippley asked.

“We hope that they’ll do it for the benefit of their county and not lower the standard just to make it fit. There still has to be some ethics and planning involved,” Amundson said.

Livestock developers interested in building in South Dakota should work with the Governor’s Office of Economic Development to fill out an application for the program they are qualified for, said Mary Lehecka Nelson, a spokeswoman with the office.

The application must then be approved by the Board of Economic Development. Developers must still go through the state permitting process.

The Reinvestment Payment Program “provides reinvestment payments to projects in excess of $20,000,000, or with equipment upgrades in excess of $2,000,000,” according to information from the state.

The South Dakota Jobs Program is to help companies offset “upfront costs associated with relocating or expanding operations and/or equipment in South Dakota.”

More information about and applications for the Reinvestment Payment and South Dakota Jobs programs are available online at