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).
