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How Much Will TransCanada Pay for Its Pipelines?

April 6, 2010

Keystone pipeline under construction near Yankton, SD in July 2009

TransCanada is threatening to move two pumping stations for its Keystone XL pipeline out of South Dakota into neighboring states, in response to recently passed South Dakota legislation that reduced a tax refund the company wanted. Which states get the pumping stations determines which counties can collect tax money for them.

The question of tax exemptions for TransCanada’s Keystone pipeline projects has generated controversy in more than just South Dakota. In Kansas, for instance, six counties are unhappy that they will not be able to collect property taxes on the pipeline for its first 10 years of operation. They are hoping for a legislative fix so they could get other payment in lieu of taxes. But a recent article suggests that their hope will not be realized.

Some in Kansas are openly questioning the idea that TransCanada would have bypassed their state with the Keystone pipeline if tax concessions were not granted.

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