PIERRE, S.D. (SDBA) — Scientifically, lithium is not a precious metal.
And as of today (Monday), legislatively, it won’t be taxed in South Dakota.
At least not yet.
On a reconsideration vote this afternoon (Monday), the Senate again failed to pass taxing lithium at the severance tax rate of 5% on a 21 to 12 vote. HB1043 needed a two-thirds vote or 24 votes to pass.
Bill supporter Republican Sen. Randy Deibert (dye-burt) from Spearfish said companies in the Black Hills are exploring lithium. He said the state needs to make these companies aware that the state is “going to have some revenue streams from what they mine in the Black Hills.”
However, Republican Sen. David Johnson of Rapid City said the bill puts up a big banner that says, “tax, tax, tax.” He said it would disincentivize future mining in the Black Hills if passed.
Johnson also said lithium is not a precious metal like gold or silver. A fellow opponent, Republican Sen. Brent Hoffman from Hartford, said it was like the state was “defining a cat as a dog” by calling it a precious metal and was a legislative dodge.
Johnson wants all the stakeholders in lithium to get together and discuss how and when the metal should be taxed.
Forms of lithium are used as a mood stabilizer and a lubricant. It is also a key component of lithium batteries, including those used in electric vehicles or EVs. The Australian government considers lithium a “critical metal.” Most lithium is mined in Australia, Chile, and Argentina. There is a lithium mine in Nevada.
The legislature defeated a similar measure last session as well.
