A South Dakota House committee has unanimously approved Gov. Dennis Daugaard's plan to stabilize state income from its tax on bank income.
The state's bank franchise tax is based on the portion of a bank's property, payroll and receipts attributable to South Dakota.
State Revenue Secretary Andy Gerlach says the current formula does not take into account modern banking practices because different parts of a transaction can take part in different states. The bill would calculate South Dakota's share of bank receipts on where a customer is located, rather than where the bank activity takes place.
Gerlach says without the change, state bank tax revenue would fall to about $4 million a year. He says the change will stabilize receipts at $8 million to $10 million a year.
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