Administrative Rule 64:27 | South Dakota Legislature

(1) "Ultimate sale," an arm's length transaction between equal bargaining parties at a price which accurately reflects the fair market value of products at the time of the sale.

Source: 2 SDR 21, effective September 18, 1975; 5 SDR 60, effective January 25, 1979; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-42, 10-39-44.

Rule 64:27:01:01.01 Gross yields defined.

64:27:01:01.01. Gross yields defined. Gross yields are all gains, incomes, receipts, and profits derived from the sale of minerals and mineral products produced in South Dakota. All amounts shall be included in the gross yields of the tax year in which they are received or accrued by the taxpayer. Gross yields shall be determined at the point of ultimate sale of the mineral or mineral product by the producer of that product.

Source: 2 SDR 21, effective September 18, 1975; 5 SDR 60, effective January 25, 1979; transferred from § 64:27:01:01, 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-42, 10-39-44.

Rule 64:27:01:02 Method of accounting.

64:27:01:02. Method of accounting. The method of accounting shall be that method normally used by the taxpayer in the ordinary course of business if it accurately reflects the taxpayer's income for the taxable year. The taxpayer may not change the method of accounting without the prior consent of the department.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.2.

Rule 64:27:01:03 Verified estimates.

64:27:01:03. Verified estimates. An estimate of the tax due in the current taxable year shall be verified by the preparer's sworn statement that the estimate accurately reflects the expected earnings of the taxpayer for the taxable year involved.

The verified estimate shall contain the gross receipts attained, the allowable deductions taken, the resulting net profit, and the tax due on the profit. The verified estimate shall be on the form provided by the department and shall be postmarked no later than the thirtieth day of the month in which the tax is due.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.3.

Rule 64:27:01:04 Repealed.

64:27:01:04. Small operators -- Filing of estimate.Repealed.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; repealed, 14 SDR 95, effective January 10, 1988.

Rule 64:27:01:05 Repealed.

64:27:01:05. Verification.Repealed.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995; repealed, 23 SDR 117, effective January 27, 1997.

Rule 64:27:01:06 Extension of time for filing.

64:27:01:06. Extension of time for filing. The secretary, on a showing of good cause, may extend the due date for the filing of a verified estimate or statement by not more than 60 days. Interest shall accrue during the extended period, but the secretary may not attach a lien to the property of the taxpayer until the extended time has ended.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.3, 10-39-45.4, 10-59-6.

Rule 64:27:01:07 Repealed.

64:27:01:07. Absence of filing verified statement or estimates.Repealed.

Source: 2 SDR 21, effective September 18, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:01:08 Repealed.

64:27:01:08. Refund.Repealed.

Source: 2 SDR 21, effective September 18, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:01:09 Repealed.

64:27:01:09. Unit of mines.Repealed.

Source: 2 SDR 21, effective September 18, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:01:10 Repealed.

64:27:01:10. Producing unit.Repealed.

Source: 2 SDR 21, effective September 18, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:01:11 Repealed.

64:27:01:11. Taxpayer determination of operating unit.Repealed.

Source: 2 SDR 21, effective September 18, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:01:12 Repealed.

64:27:01:12. Undeveloped operating units.Repealed.

Source: 2 SDR 21, effective September 1, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:01:13 Travel expenses.

64:27:01:13. Travel expenses. Expenses incurred while traveling within this state for general business purposes is deductible as a general administrative expense.

Expenses for travel outside South Dakota but beginning or ending within this state and incurred for general business purposes is deductible as a general administrative expense.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.2(12).

Rule 64:27:01:14 Cost of repair and replacement.

64:27:01:14. Cost of repair and replacement. The following repair and replacement costs are chargeable costs for deduction purposes:

(1) The cost of repairing and maintaining mining machinery;

(2) The cost of timber for the inside of a mine;

(3) The cost of assaying and the maintenance of the assaying equipment; and

(4) The costs of repair and maintenance of general administrative facilities within this state.

The cost of renewal of mining machinery and the cost of its installation and the cost of new equipment, laboratories, and administrative facilities are not chargeable against operating costs for deduction purposes.

Expenditures for equipment and equipment replacements which are necessary to maintain the normal output solely because of the recession of the working faces of the mine and which do not increase the value of the mine, do not decrease the cost of production of mineral units, or do not represent an amount expended in restoring property or in making good the exhaustion thereof for which an allowance is or has been made shall be deducted as ordinary and necessary business expenses and need not be capitalized.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.2(5).

Rule 64:27:01:15 Leasing expenditures deductible.

64:27:01:15. Leasing expenditures deductible. Cost of leasing or renting property for the purpose of extracting minerals or mineral products is deductible as a cost of extraction.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.2(1).

Rule 64:27:01:16 Limitations of deductions.

64:27:01:16. Limitations of deductions. Deductions allowed in SDCL 10-39-45.2(6) are limited to expenditures incurred in production activities in this state.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.2(6).

Declaratory Ruling: The formula for determining net profit for mineral extraction tax on profit of minerals extracted in-state and shipped out-of-state for processing, where N = net profit, G = total gross yield, AS = in-state administrative costs and salaries, TS = South Dakota state and local taxes, CS = allowable costs incurred in-state, CO = allowable costs incurred out-of-state, and GS = gross yield from South Dakota minerals, is as follows:

N = GS - (AS + TS + CS) - CO x GS

Secretary of Revenue Declaratory Ruling No. 77-9.

Rule 64:27:01:17 Special assessments.

64:27:01:17. Special assessments. Special assessments levied by local governments shall be deducted as are all local taxes.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.2(11).

Rule 64:27:01:18 Depletion allowance.

64:27:01:18. Depletion allowance. The depletion of the source of minerals and mineral products is not a deductible expense.

Source: 2 SDR 21, effective September 18, 1975; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995.

General Authority:SDCL 10-39-49.

Law Implemented:SDCL 10-39-45.2.

Rule 64:27:01:19 Repealed.

64:27:01:19. Development costs.Repealed.

Source: 2 SDR 21, effective September 18, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:01:20 Repealed.

64:27:01:20. Motor vehicles subject to tax.Repealed.

Source: 2 SDR 21, effective September 18, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:01:21 Repealed.

64:27:01:21. Disposition of tax moneys paid under protest.Repealed.

Source: 2 SDR 21, effective September 18, 1975; repealed, 13 SDR 129, 13 SDR 134, effective July 1, 1987.

Rule 64:27:02 OIL AND GAS EXTRACTION

CHAPTER 64:27:02

OIL AND GAS EXTRACTION

(Repealed. 5 SDR 60, effective January 25, 1979.)

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