P - Present
E - Excused
A - Absent
Roll Call
P Anderson
P Dennert
P Diedrich
P Goodwin
P Gosch
P Hansen
P Haugaard
P Jensen (Kevin)
E McCleerey
E Peterson (Kent)
P Smith (Jamie)
P Beal, Vice-Chair
P Qualm, Chair
OTHERS PRESENT: See Original Minutes
The meeting was called to order by Representative Qualm.
MOTION: TO APPROVE THE MINUTES OF MARCH 4, 2019
Moved by: Hansen
Second by: Beal
Action: Prevailed by voice vote.
SB 86: provide for calculations of sales tax revenues from sellers located outside of the state.
Presented by: Senator Jeff Partridge (Handout(s): #1)
Proponents: Jim Terwilliger, Secretary, Department of Revenue
David Owen, South Dakota Chamber of Commerce & Industry
Nathan Sanderson, South Dakota Retailers Association
Michael Held, South Dakota Farm Bureau Federation
Wade Pogany, Associated School Boards of South Dakota
Debra Owen, Sioux Falls Area Chamber of Commerce
" Section 1. That the code be amended by adding a NEW SECTION to read:
Section 2. That § 10-45-2 be amended to read:
10-45-2. There is hereby imposed a tax upon the privilege of engaging in business as a retailer, a
tax of four and one-half percent upon the gross receipts of all sales of tangible personal property
consisting of goods, wares, or merchandise, except as otherwise provided in this chapter, sold at retail
in the State of South Dakota this state to consumers or users. The rate of tax under this section is the
same as provided under section 1 of this Act.
Section 3. That § 10-45-5 be amended to read:
10-45-5. There is imposed a tax at the rate of four and one-half percent upon the gross receipts of
any person from engaging or continuing in any of the following businesses or services in this state:
abstracters; accountants; ancillary services; architects; barbers; beauty shops; bill collection services;
blacksmith shops; car washing; dry cleaning; dyeing; exterminators; garage and service stations;
garment alteration; cleaning and pressing; janitorial services and supplies; specialty cleaners; laundry;
linen and towel supply; membership or entrance fees for the use of a facility or for the right to purchase
tangible personal property, any product transferred electronically, or services; photography; photo
developing and enlarging; tire recapping; welding and all repair services, except repair services for farm
machinery, attachment units, and irrigation equipment used exclusively for agricultural purposes; cable
television; and rentals of tangible personal property except leases of tangible personal property between
one telephone company and another telephone company, motor vehicles as defined pursuant to § 32-5-1
leased under a single contract for more than twenty-eight days and mobile homes. However, the specific
Specific enumeration of businesses and professions made in any business or profession under this
section does not, in any way, limit the scope and effect of the provisions of § 10-45-4. The rate of tax
under this section is the same as provided under section 1 of this Act.
Section 4. That § 10-45-5.3 be amended to read:
10-45-5.3. There is imposed, at the rate of four and one-half percent, an excise tax on the gross
receipts of any person engaging in oil and gas field services (group no. 138) as enumerated in the
Standard Industrial Classification Manual, 1987, as prepared by the Statistical Policy Division of the
Office of Management and Budget, Office of the President. The rate of tax under this section is the
same as provided under section 1 of this Act.
Section 5. That § 10-45-6 be amended to read:
10-45-6. There is hereby imposed a tax of four and one-half percent upon the gross receipts from
sales, furnishing, or service of gas, electricity, and water, including the gross receipts from such sales
by any municipal corporation furnishing gas, and electricity, to the public in its proprietary capacity,
except as otherwise provided in this chapter, when sold at retail in the State of South Dakota this state
to consumers or users. The rate of tax under this section is the same as provided under section 1 of this
Act.
Section 6. That § 10-45-6.1 be amended to read:
10-45-6.1. Except as provided in § 10-45-6.2, there is hereby imposed a tax of four and one-half
percent upon the gross receipts from providing any intrastate, interstate, or international
telecommunications service that originates or terminates in this state and that is billed or charged to a
service address in this state, or that both originates and terminates in this state. However, the The tax
imposed by this section does not apply to:
10-45-6.2. There is hereby imposed a tax of four and one-half percent upon the gross receipts of
mobile telecommunications services, as defined in 4 U.S.C. § 124(7) as of January 1, 2002, that
originate and terminate in the same state and are billed to a customer with a place of primary use in this
state or are deemed to have originated or been received in this state and to be billed or charged to a
service address in this state if the customer's place of primary use is located in this state regardless of
where the service actually originates or terminates. Notwithstanding any other provision of this chapter
and for purposes of the tax imposed by this section, the tax imposed upon mobile telecommunication
services shall be administered in accordance with 4 U.S.C. §§ 116-126 as in effect on July 28, 2000.
The rate of tax under this section is the same as provided under section 1 of this Act.
Section 8. That § 10-45-8 be amended to read:
10-45-8. There is imposed a tax of four and one-half percent upon the gross receipts from all sales
of tickets or admissions to places of amusement and athletic contests or events, except as otherwise
provided in this chapter. The rate of tax under this section is the same as provided under section 1 of
this Act.
Section 9. That § 10-45-71 be amended to read:
10-45-71. There is imposed a tax of four and one-half percent on upon the gross receipts from the
transportation of passengers. The tax imposed by this section shall apply to any transportation of
passengers if the passenger boards and exits the mode of transportation within this state. The rate of tax
under this section is the same as provided under section 1 of this Act.
Section 10. That § 10-46-2.1 be amended to read:
10-46-2.1. For the privilege of using services in South Dakota this state, except those types of any
services exempted by § 10-46-17.3, there is imposed on the person using the service an excise tax equal
to four and one-half percent of on the value of the services at the time they are rendered. However, this
The tax under this section may not be imposed on any service rendered by a related corporation as
defined in subdivision 10-43-1(11) for use by a financial institution as defined in subdivision 10-43-1(4) or on any service rendered by a financial institution as defined in subdivision 10-43-1(4) for use
by a related corporation as defined in subdivision 10-43-1(11). For the purposes of this section, the term
related corporation includes a corporation which together with the financial institution is part of a
controlled group of corporations as defined in 26 U.S.C. § 1563 as in effect on January 1, 1989, except
that the eighty percent ownership requirements set forth in 26 U.S.C. § 563(a)(2)(A) for a brother-sister
controlled group are reduced to fifty-one percent. For the purpose of this chapter, services rendered by
an employee for the use of his employer are not taxable. The rate of tax under this section is the same
as provided under section 1 of this Act.
Section 11. That § 10-46-2.2 be amended to read:
Section 12. That § 10-46-58 be amended to read:
10-46-58. There is imposed a tax of four and one-half percent on the privilege of the use of any
transportation of passengers. The tax imposed by this section shall apply to any transportation of
passengers if the passenger boards and exits the mode of transportation within this state. The rate of tax
under this section is the same as provided under section 1 of this Act.
Section 13. That § 10-46-69 be amended to read:
10-46-69. There is hereby imposed a tax of four and one-half percent upon the privilege of the use
of mobile telecommunications services, as defined in 4 U.S.C. § 124(7) as of January 1, 2002, that
originate and terminate in the same state and are billed to a customer with a place of primary use in this
state. Notwithstanding any other provision of this chapter and for purposes of the tax imposed by this
section, the tax imposed upon mobile telecommunication services shall be administered in accordance
with 4 U.S.C. §§ 116-126 as in effect on July 28, 2000. The rate of tax under this section is the same
as provided under section 1 of this Act.
Section 14. That § 10-46-69.1 be amended to read:
10-46-69.1. Except as provided in § 10-46-69, there is hereby imposed a tax of four and one-half
percent upon the privilege of the use of any intrastate, interstate, or international telecommunications
service that originates or terminates in this state and that is billed or charged to a service address in this
state, or that both originates and terminates in this state. However, the tax imposed by this section does
not apply to:
10-46-69.2. There is hereby imposed a tax of four and one-half percent upon the privilege of the
use of any ancillary services. The rate of tax under this section is the same as provided under section
1 of this Act.
Section 16. That § 10-46E-1 be amended to read:
10-46E-1. There is hereby imposed an excise tax of four and one-half percent on the gross receipts
from the sale, resale, or lease of farm machinery, attachment units, and irrigation equipment used
exclusively for agricultural purposes. However, if If any trade-in or exchange of used farm machinery,
attachment units, and irrigation equipment is involved in the transaction, the excise tax is only due and
may only be collected on the cash difference. The rate of tax under this section is the same as provided
under section 1 of this Act.
Section 17. That § 10-58-1 be amended to read:
10-58-1. There is imposed upon owners and operators a special amusement excise tax of four and
one-half percent of on the gross receipts from the operation of any mechanical or electronic amusement
device. The rate of tax under this section is the same as provided under section 1 of this Act.
Section 18. That § 10-64-9 be repealed.
10-64-9. If the state is able to enforce the obligation to collect and remit sales tax on remote sellers
who deliver tangible personal property, products transferred electronically, or services directly to the
citizens of South Dakota, the additional net revenue from such obligation shall be used to reduce the
rate of certain taxes. The rate of tax imposed by §§ 10-45-2, 10-45-5, 10-45-5.3, 10-45-6, 10-45-6.1,
10-45-6.2, 10-45-8, 10-45-71, 10-46-2.1, 10-46-2.2, 10-46-58, 10-46-69, 10-46-69.1, 10-46-69.2, 10-46E-1, and 10-58-1 shall be reduced by one-tenth percent on July first following the calendar year for
which each additional twenty million dollar increment of net revenue is collected and remitted by such
remote sellers. However, the rate of tax imposed by §§ 10-45-2, 10-45-5, 10-45-5.3, 10-45-6, 10-45-6.1, 10-45-6.2, 10-45-8, 10-45-71, 10-46-2.1, 10-46-2.2, 10-46-58, 10-46-69, 10-46-69.1, 10-46-69.2,
10-46E-1, and 10-58-1 may not be reduced below four percent pursuant to the provisions of this
section. "
MOTION: DO PASS SB 164
Moved by: Gosch
Second by: Haugaard
Action: Prevailed by roll call vote. (11-0-2-0)
Voting Yes: Anderson, Dennert, Diedrich, Goodwin, Gosch, Hansen, Haugaard, Jensen (Kevin),
Smith (Jamie), Beal, Qualm
Excused: McCleerey, Peterson (Kent)
MOTION: TO INVOKE RULE 7-1.5. TO IMMEDIATELY CONSIDER HR1005
Moved by: Haugaard
Second by: Gosch
Action: Prevailed by roll call vote. (9-2-2-0)
Pam Kean