64:06:02:81.01.  Taxability of nonresident attorney services used in South Dakota. Any person using services in South Dakota that are provided by a nonresident attorney is liable for use tax on the cost of the services if sales tax is not paid.

          Source: 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995; 24 SDR 180, effective July 1, 1998; 31 SDR 214, effective July 6, 2005; 41 SDR 173, effective May 14, 2015.

          General Authority: SDCL 10-45-47.1(3), 10-46-35.1(3).

          Law Implemented: SDCL 10-45-4, 10-45-4.1, 10-45-5.2, 10-45-108, 10-46-2.1, 10-46-18.1.

          Examples:

          (1)  Carl Client hires Linda Lawyer, an Iowa attorney, to represent Carl in a South Dakota lawsuit. Linda does not have a license to practice law in South Dakota but, pursuant to SDCL 16-18-2, is admitted to represent Carl in Carl's lawsuit. Linda must obtain a South Dakota sales tax permit. Linda does not pay sales tax on gross receipts from the services provided by Linda to Carl because Linda's office is in Iowa. Carl will owe use tax because the service is used for a lawsuit in South Dakota.

          (2)  Ivana Inventor, a South Dakota resident, hires Adam Attorney, a Minnesota attorney, to obtain a patent for Ivana. Adam is not licensed to practice law in South Dakota and is not required to comply with SDCL 16-18-2. Adam's legal services to obtain the patent are used by Ivana in South Dakota and Ivana is liable for use tax.