Lithium Valley
Lithium Valley
Lithium Excise Tax Funding Plan
Disclosure
The County of Imperial Lithium Excise Tax Funding Plan is based solely on estimations and projections and is considered speculative. While the plan references legal sections that govern the tax amount, as of this writing (August 29, 2024), there are no producers of commercial scale lithium within the County of Imperial. Caution is advised to any person, group or government agency regarding when or if the revenues described and discussed in this Funding Plan come to fruition. This document should be read in conjunction with SB 125, and any subsequently enacted legislation. Should any inconsistencies arise between this document and any existing or subsequently adopted statutory requirements, the statutory language controls.
ABOUT THE LITHIUM EXTRACTION EXCISE TAX
SB 125 refers to Senate Bill No. 125 adopted by the California Legislature and approved by the Governor in 2022. This bill adopted numerous amendments to the California Code, including the Lithium Extraction Tax Law, codified in Revenue and Taxation Code §§ 47000 et seq (statutory references in this document are to the Revenue and Taxation Code unless otherwise specified). In particular, this tax law requires any person who extracts lithium from geothermal fluid, spodumene ore, rock, minerals, clay, or any other naturally occurring substance in this state to pay a lithium extraction excise tax upon each metric ton of extracted lithium carbonate equivalent.
Section 47010(a) states that beginning January 1, 2023, a Producer will be required to pay a lithium extraction excise tax for each metric ton of lithium carbonate equivalent extracted from geothermal fluid, spodumene ore, rock, minerals, clay, or any other naturally occurring substance in this state. The tax schedule is as follows:
Tax Rate per Metric Ton Extracted | Tax Rate per Metric Ton Extracted |
|---|---|
20,000 or less | $400 |
20, 001 to 30, 000 | $600 |
30,001 and over | $800 |
Lithium and lithium compounds can be extracted in different forms and methods, for this reason, SB 125 uses lithium carbonate equivalent (also known as LCE). All lithium and compounds extracted will be converted to LCE by multiplying the tonnage of lithium and lithium compounds by the appropriate conversion factor:
Tax Rate per Metric Ton Extracted | Tax Rate per Metric Ton Extracted |
|---|---|
Lithium (Li) | 5.323 |
Lithium Oxide (Li2O) | 2.473 |
Lithium Chloride (LiCl) | 0.871 |
Lithium Bromide (LiBr) | 0.425 |
Lithium Hydroxide Monohydrate (LiOH.H2O) | 0.880 |
Butyllithium (C4HgLi) | 0.576 |
Lithium Carbonate (Li2CO3) | 1.000 |
Salton Sea Restoration Fund
Section 47100(b) requires that 20% of the lithium excise tax is allocated to the Lithium Subaccount within the Salton Sea Restoration Fund created in Fish and Game Code Section 2951, which is managed by the California Natural Resources Agency. As of August 2024, no plan has been released by the State regarding how these funds will be used. Any questions should be directed to the California Director of Fish and Wildlife or the Salton Sea Restoration Fund management team.
County of Imperial
Section 47100(a)(1) allocates 80% of the lithium tax to be disbursed to the County of Imperial and provides the following direction: “Each county shall establish for deposit of these revenues an account or fund separate from the other accounts and funds of the county.” Section 47100(a)(2)(A) further provides that: “Of the amount disbursed to the County of Imperial pursuant to this subdivision, the county shall establish a method to distribute an amount not less than 30% of that disbursed amount to the County of Imperial communities that are most directly and indirectly impacted by the lithium extraction activities, including, but not limited to, the following communities:”
“Each county shall establish for deposit of these revenues an account or fund separate from the other accounts and funds of the county…Of the amount disbursed to the County of Imperial pursuant to this subdivision, the county shall establish a method to distribute an amount not less than 30% of that disbursed amount to the County of Imperial communities that are most directly and indirectly impacted by the lithium extraction activities, including, but not limited to, the following communities”
Directly Affected Communities:
Bombay Beach
The City of Brawley
The City of Calipatria
The City of Westmorland
Niland
Indirectly Affected Communities:
Bard
The City of Calexico
Desert Shores
The City of El Centro
Heber
The City of Holtville
The City of Imperial
Ocotillo
Palo Verde
Salton City
Salton Sea Beach
Seeley
Winterhaven
Vista Del Mar
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