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600 E. Boulevard Ave.
  Bismarck, ND 58505-0599
  328.7088 phone
  701.328.3700 fax
  877.328.7088 toll-free

Payment In Lieu of Property Tax

Coal Conversion Facility Privilege Tax Exemptions

A privilege tax, which is in lieu of property taxes on the facility, is imposed monthly on a coal conversion facility. The land on which the plant is located remains subject to property tax.

Electrical generating facilities

    An electrical generating facility with at least one generating unit with a capacity of 10,000 kilowatts or more is subject to a tax of .65 mill times 60% of installed capacity times the number of hours in the tax period, plus a tax of .25 mill per kilowatt hour of electricity produced for sale. A new or repowered unit is exempt from the state's share of both taxes for the first five years of operation, and the county where the plant is located may exempt all or part of its share of the tax based on capacity for up to five years.

Other coal conversion facilities

    A coal gasification facility that consumes, or is designed to use, 500,000 tons or more of coal per year is subject to a tax equal to the greater of 4.1% of gross receipts or 13 cents on each 1,000 cubic feet of synthetic natural gas produced for sale. Production in excess of 110 million cubic feet per day is exempt.

    A coal beneficiation facility is subject to a tax of 20 cents per ton of beneficiated coal produced for sale or 1% of gross receipts, whichever is greater. Production in excess of 80% of plant capacity is exempt.

    For any other coal conversion facility that consumes, or is designed to use, 500,000 tons or more of coal per year, the tax is 4.1% of gross receipts.

    A new coal conversion facility other than an electrical generating facility is exempt from the state's share of the tax for the first five years of operation, and the county where the plant is located may exempt the county's share of the tax for up to five years.

Carbon dioxide sale and capture exemptions

    In computing its taxable gross receipts, a coal conversion facility may exclude income from the sale and transportation of carbon dioxide used in the enhanced recovery of oil or natural gas.

    A coal conversion facility that achieves a 20% capture of carbon dioxide emissions during a taxable period after December 31, 2009, is exempt from 20% of the state's share of the tax. An additional 1% of the state's share of the tax is exempted for each additional 2% capture of carbon dioxide emissions, to a maximum of 50% of the state's share of the tax.

  • [Reference: N.D.C.C. ch. 57-60]

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