Imposition of tax on potash

A tax at the rate of two percent is imposed upon all potash produced within this state. The tax levied attaches to the whole production of potash except any byproducts of potash taxed under section 57-65-03.

# 1.

The tax on potash is assessed against the sales price of the potash in an arm's-length contract between the taxpayer and the purchaser. If a potash sale or transfer is not the result of an arm's-length contract, the tax is calculated by taking a ton of two thousand pounds [907.18 kilograms] of potash produced times the potash tax rate times the annual average price of potash. The "annual average price of potash" for each twelve-month period beginning July first is the potash producer price index (commodity code PCU212391212391) as calculated and published by the United States department of labor, bureau of labor statistics, for the previous calendar year. For taxable production for the twelve months beginning July 1, 2011, the "annual average price of potash" is three hundred fifty-seven dollars and ten cents.

# 2.

The tax department shall provide the annual average price of potash for the fiscal year to affected taxpayers by written notice mailed before June first.

# 3.

If the potash producer price index is discontinued, a comparable index must be adopted by the department by an administrative rule.

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