Renewable Energy Facility Sales and Use Tax Reimbursement
Administered by Governor's Office of Economic Development
South Dakota offers a sales and use tax reimbursement for renewable energy systems if your project costs exceed $20 million for new facilities or $2 million for equipment upgrades to existing systems; you must apply to the Governor's Office of Economic Development within 90 days of starting construction to receive reimbursement up to the total sales and use taxes paid.
This program reimburses eligible renewable energy projects for sales and use taxes paid on equipment, labor, and installation costs when project thresholds are met ($20 million for new facilities or $2 million for upgrades); the reimbursement can be transferred, making it a valuable incentive to market to clients undertaking significant renewable energy investments.
The reinvestment payment program, authorized under S.B. 235 (2013), covers wind and other renewable energy facilities designated as targeted industries by GOED; the Board of Economic Development reviews applications filed within 90 days of construction start, evaluating project necessity and meeting statutory criteria, with reimbursements capped at actual sales and use taxes paid on eligible project costs including land, labor, equipment, and interconnection systems.
Program details
- Program ID
- 5422
- Effective
- 4/1/2013
- Last updated
- 1/12/2026
Eligibility
- Sectors
- commercial industrial installers/contractors agricultural
- Technologies
- geothermal electric solar thermal electric solar photovoltaics wind (all) biomass hydrogen municipal solid waste combined heat & power landfill gas hydroelectric (small) anaerobic digestion
Program summary
South Dakota allows for a reinvestment payment up to the total amount of sales and use taxes paid for certain new or expanded renewable energy systems, equipment upgrades to existing systems, and manufacturing facilities that produce renewable energy equipment. S.B. 235 (2013) referred specifically to wind energy facilities, but also allows for "power generation facilities" and facilities defined by the Governor's Office of Economic Development (GOED) as targeted industries. Based on that authority, the GOED chose to extend this incentive to other types of renewable energy.
To qualify, the project costs associated with a new or expanded facility must exceed $20 million, or the costs associated with equipment upgrades must exceed $2 million. Eligible project costs include the amount paid by the project owner in money, credits, property, or other considerations associated with a project. Also included are the costs associated with land, labor, and equipment, including towers, wind turbine generators, power collection systems, and electric interconnection systems.
Applicants must file an application with the GOED within 90 days of starting construction. In reviewing the application, the Board of Economic Development will consider the likelihood that the investment would have occurred without the reinvestment payment, and other criteria listed in the legislation and rules to be developed by the Board. The reinvestment payment may be transferred to other entities.
Contact & resources
- Contact email
- Hunter.Roberts@state.sd.us
- Additional resources
Please verify current program details with the administering agency before making any financial decisions.
