64:06:01:01. Armed services personnel and veterans. Gross receipts from retail sales to persons in the armed services of the United States are subject to sales tax regardless where the merchandise is received. The fact that receipt is within a military reservation does not affect taxability of gross receipts derived from the transaction. Gross receipts from retail sales to all veterans are subject to sales tax.
Source: SL 1975, ch 16, § 1; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995; 28 SDR 178, effective July 1, 2002.
General Authority:SDCL 10-45-47.1(3).
Law Implemented:SDCL 10-45-2.
64:06:01:01.01. Sales to or by the United States army and its instrumentalities upon military reservations. Sales tax does not apply to service organizations operating exclusively within a federal area over which the state of South Dakota has conceded all jurisdiction to the United States government. Sales to or by post exchanges, officers' clubs, mess, and noncommissioned officers' clubs and all other voluntary unincorporated organizations of army personnel authorized by the secretary of defense, or sales made by such organizations to any authorized purchaser, are also exempt. The term "authorized purchaser" includes those persons who are permitted to purchase from such organizations under regulations issued by the secretary of defense.
Sales to persons in the armed forces of the United States, including civilian employees in such service, are not exempt from sales tax, unless such sales are made to them as an authorized purchaser by a service organization exclusively within a United States military reservation and authorized by the secretary of defense.
Source: SL 1975, ch 16, § 1; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from § 64:06:01:47, 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995.
General Authority:SDCL 10-45-47.1.
Law Implemented:SDCL 10-45-10.
Declaratory Ruling: The sales tax exemption from receipts of sales of tangible personal property to governmental agencies also applies to the gross receipts from sales of services to governmental entities. Secretary of Revenue Declaratory Ruling No. 79-3.
64:06:01:01.02. Sales to governmental agencies. Before purchases by a government or its subdivisions are exempted by the department, proof is required from the retailer that such sales were actually paid out of government funds or that the governmental agency provided an exemption certificate to the retailer.
No special exemption certificate is necessary when making sales to the United States, tribal governments, the District of Columbia, the State of South Dakota, other states, and their subdivisions if the billing or invoices indicate such sales and the records show that payment was received from the exempt governmental entity or that the purchases were made by a credit card issued to and in the name of the exempt governmental entity.
State boards and commissions created by law are exempt from sales or use tax. Boards and commissions created by legislative act are part of state government and sales to any board or commission are sales to the state.
This exemption does not extend to sales to or purchases of tangible personal property or any product transferred electronically for the personal use of officials, members, or employees of such institutions.
Source: SL 1975, ch 16, § 1; 2 SDR 40, effective December 8, 1975; 8 SDR 81, effective January 10, 1982; 11 SDR 1, effective July 19, 1984; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from § 64:06:01:48, 16 SDR 76, effective November 1, 1989; 19 SDR 42, effective September 29, 1992; 21 SDR 219, effective July 1, 1995; 22 SDR 6, effective July 23, 1995; 29 SDR 177, effective July 2, 2003; 30 SDR 58, effective November 5, 2003; 35 SDR 48, effective September 8, 2008.
General Authority: SDCL 10-45-47.1(3).
Law Implemented: SDCL 10-45-10.
Declaratory Ruling: The sales tax exemption from receipts of sales of tangible personal property to governmental agencies also applies to the gross receipts from sales of services to governmental entities. Secretary of Revenue Declaratory Ruling No. 79-3.
Court Decisions: A nonprofit corporation exempt from federal income tax, which provides free legal service to persons of low income and is funded by the federal government, qualifies as a relief agency under SDCL 10-45-10 and does not have to meet each factor enumerated in § 64:06:01:38. East River Legal Services vs State, Department of Revenue, 303 N.W. 2d 379 (March 18, 1981).
A nonprofit corporation exempt from federal income taxes, which provides health and nutrition services for the elderly; education and development services for "headstart" and day care for children; weatherization, self-help gardens, and fuel assistance services for low income and elderly families; employment services for low income persons; and assistance and guidance to low income persons for community development, all without cost to recipients except for certain day care services, the activities of which are financed by the federal government, qualifies as a relief agency and is exempt from having to pay sales tax. Western South Dakota Community Action Program, Inc. vs State, Department of Revenue, 303 N.W. 2d 379 (March 18, 1981).
64:06:01:01.03. Sales by United States government. The United States government is not required to collect tax from the purchaser when making sales otherwise subject to sales tax unless the United States Congress has provided otherwise. Persons making purchases from the government of the United States or from any of the exempt agencies of tangible personal property, any product transferred electronically, and services that are subject to sales or use tax must report and pay sales or use tax measured by the purchase price unless the purchases are otherwise exempt.
Source: SL 1975, ch 16, § 1; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from § 64:06:01:52, 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995; 35 SDR 48, effective September 8, 2008.
General Authority: SDCL 10-45-47.1(3), 10-46-35.1(3).
Law Implemented: SDCL 10-45-10, 10-46-4.
64:06:01:01.04. Public and municipal corporations. Gross receipts from sales to public or municipal corporations are exempt from sales tax. A public corporation or municipal corporation is one created by the state or a municipality, pursuant to authority granted by South Dakota law, for political purposes to act as an agency in the administration of civil government. The following are indicia of a public corporation or of a municipal corporation:
(1) It performs a governmental function;
(2) It is a nonprofit organization exempt from federal income tax;
(3) It is licensed or chartered by a division of state or local government;
(4) It is subject to inspection and audit accomplished or reviewed by a division of state or local government; and
(5) Some statutory provision is made for the levy of state or local taxes for funding of some activity of the organization or for authority to spend funds raised by taxation.
Source: 2 SDR 40, effective December 8, 1975; 5 SDR 60, effective January 25, 1979; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from § 64:06:01:57, 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995.
General Authority:SDCL 10-45-47.1(3).
Law Implemented:SDCL 10-45-10.
Declaratory Rulings: The sales tax exemption from receipts of sales of tangible personal property to governmental agencies also applies to the gross receipts from sales of services to governmental entities. Secretary of Revenue Declaratory Ruling No. 79-3.
Public alcohol treatment facilities approved and funded by the state division of alcoholism are not political subdivisions of the state and are not exempt from sales tax. Secretary of Revenue Declaratory Ruling No. 80-4.
