A South Dakota Senate committee on Wednesday rejected a bill that sought to boost state revenue from gold mining by restructuring the severance tax.
Sen. Mike Rohl, R‑Aberdeen, proposed replacing the current $4‑per‑ounce severance tax with a 0.5% tax on the market value of extracted gold. With gold prices now around $4,800 per ounce, the change would have raised the effective tax to about $24 per ounce. The existing rate was set in 1994, when gold was roughly $400 per ounce, and includes a sliding scale that tops out at $8—far below today’s prices.
Rohl argued the update was modest and aligned with the original intent of the tax. Last fiscal year, the severance tax generated $784,000 for the state, while a separate 10% net‑profits tax brought in $9.8 million. The Wharf Mine near Lead—the state’s only large‑scale gold mine—reported $228 million in gold sales in 2024.
Under Rohl’s proposal, the first $1 million raised would have gone to the general fund, with additional revenue directed to a new rural water infrastructure fund, which he said would fill a gap in long‑term water project funding.
Opponents warned that increasing taxes could harm Wharf Mine and the local economy.
The Senate Taxation Committee voted 7‑0 to kill the bill.
In a separate unanimous vote, the committee also rejected a proposal from Sen. John Carley, R‑Piedmont, that would have eliminated property tax mill levies entirely. One opponent called the measure “not serious public policy.”
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