S.D. Codified Laws § 10-28-21.2
Any publicly operated railroad or railway corporation operating over rail lines owned by the publicly operated railroad or railway corporation located within this state may claim a credit against the tax levied on the rail lines for amounts that the railroad or railway corporation has certified as having been expended in the replacement, improvement, and repair of the rail lines. Only those expenses of a capital nature may be certified as an expense eligible for a credit pursuant to this section. The certification required by this section shall be on forms provided by the Department of Revenue. The labor and material expenses certified pursuant to this section shall be itemized separately by rail line and mile post locations. The credit provided in this section shall be applied proportionally across the railroad's entire mainline within this state, excluding any portion of the mainline that goes over ten million gross ton miles of revenue freight per mile annually in a calendar year. The credit shall be applied to tax liability over a three-year period in an amount equal to thirty-three and one-third percent the first year following certification; thirty-three and one-third percent of such an amount shall carry forward into the second year following certification; and thirty-three and one-third percent shall carry forward into the third year following certification. Each year's carryover shall be accumulated as a tax credit with other years' annual tax credits. No credit may be given for:
SDCL 10-28-21.2