Cost of repair and replacement

64:27:01:14. Cost of repair and replacement. The following repair and replacement costs are chargeable costs for deduction purposes:

# (1)

The cost of repairing and maintaining mining machinery;

# (2)

The cost of timber for the inside of a mine;

# (3)

The cost of assaying and the maintenance of the assaying equipment; and

# (4)

The costs of repair and maintenance of general administrative facilities within this state.
The cost of renewal of mining machinery and the cost of its installation and the cost of new equipment, laboratories, and administrative facilities are not chargeable against operating costs for deduction purposes.
Expenditures for equipment and equipment replacements which are necessary to maintain the normal output solely because of the recession of the working faces of the mine and which do not increase the value of the mine, do not decrease the cost of production of mineral units, or do not represent an amount expended in restoring property or in making good the exhaustion thereof for which an allowance is or has been made shall be deducted as ordinary and necessary business expenses and need not be capitalized.

Last amended: Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995. General Authority: SDCL 10-39-49. Law Implemented: SDCL 10-39-45.2(5).

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