An Act to exclude guaranteed payments made to partners from the definition of gross receipts.

Be it enacted by the Legislature of the State of South Dakota:

Section 1. That a NEW SECTION be added to chapter 10-45:

For purposes of the tax imposed by this chapter, gross receipts do not include any guaranteed payment, as described in 26 U.S.C. § 707(c) (1986), to a partner who is a:

(1) Natural person;

(2) Corporation whose only employees are owners of the corporation; or

(3) Limited liability company that has no employees and is owned by a natural person.