64:06:02:03.02. Advertising cooperatives. Gross receipts received by a franchiser as a cost share or a reimbursement for purchases of exempt advertising services made by the franchiser are not subject to sales tax if:
(1) The gross receipts are paid by a franchisee to its franchiser for exempt advertising services purchased by the franchiser for the franchisee's business or the franchise;
(2) The franchiser denotes the gross receipts as a cost share or reimbursement for exempt advertising services; and
(3) The franchiser has documentation verifying that the gross receipts were received as a cost share or reimbursement for a specific exempt advertising service purchased by the franchiser.
Source: 24 SDR 97, effective January 25, 1998.
General Authority:SDCL 10-45-47.1.
Law Implemented:SDCL 10-45-2, 10-45-12.1, 10-45-20.
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