CHAPTER 10-33
TAXATION OF TELEPHONE COMPANIES
10-33-1 Annual report of gross receipts--Date of filing--Contents.
10-33-2 Gross receipts defined.
10-33-3 10-33-3. Repealed by SL 2011, ch 54, § 2.
10-33-4 Annual report of telephone company property--Date of filing.
10-33-5 Telephone lines listed in annual report--Description.
10-33-6 Telephone exchanges and other property listed in annual report--Description.
10-33-7 Capitalization and financial data listed in annual report.
10-33-8 Additional information given in annual report.
10-33-9 Addition to assessable value for failure to file report.
10-33-10 Operating property assessed for taxation by department.
10-33-11 Time of property assessment--Information to be considered.
10-33-12 10-33-12. Repealed by SL 1998, ch 67, § 2.
10-33-13 Separate valuation of exchanges outside municipalities.
10-33-14 Public Utilities Commission to provide information for uniform and fair taxation.
10-33-14.1 Considerations in determining fair market value of telephone company property.
10-33-15 Notice of assessment and hearing date before secretary of revenue.
10-33-16 Equalization of assessments--Notice to company--Certification to county auditors.
10-33-17 Rates of taxation applied to telephone property.
10-33-18 Extension of taxes to tax book--Duplicate to county treasurer--Collection of tax.
10-33-19 Collection of delinquent taxes.
10-33-20 Distribution of tax proceeds--Tax receipt.
10-33-21 Companies providing local exchange telephone service taxed on gross receipts--Rate--Minimum tax.
10-33-22 Definition of company.
10-33-23 10-33-23. Repealed by SL 2011, ch 54, § 12.
10-33-24 Determination and certification of gross receipts tax payable to school districts.
10-33-25 Time of payment of gross receipts tax.
10-33-26 Gross receipts tax in lieu of tax on operating property--Sales and use taxes.
10-33-27 Penalties for delinquency or failure to report--Collection by distress and sale.
10-33-28 10-33-28. Repealed by SL 2007, ch 52, § 3.
10-33-29 Local taxation of nonoperating property permitted.
10-33-30 Municipally owned utilities exempt.
10-33-1. Annual report of gross receipts--Date of filing--Contents.
On April fifteenth of each year, each telephone company subject to the tax imposed by § 10-33-21 shall file with the secretary of revenue on forms prescribed by the secretary a report of its gross receipts derived from the furnishing of the telephone and exchange service, rental and toll service, during the preceding calendar year. The report shall set forth the total gross receipts of the company in the State of South Dakota, together with the gross receipts within each school district in which the company operates. Each company shall furnish such other further information as the secretary shall from time to time require. The report shall be sworn to and verified by an officer of the company.
Source: SL 1955, ch 423, § 2; SDC Supp 1960, § 57.1809; SL 1965, ch 287, § 3; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 54, § 1.
10-33-2. Gross receipts defined.
The term, gross receipts, as used in this chapter means all earnings of a telephone company derived from the furnishing of such telephone and exchange service, rental and toll service, excluding receipts for capital stock issued, state sales and use taxes paid, federal excise taxes paid, uncollected bills, tolls not retained by a company and directory advertising receipts not retained by a company.
Source: SDC 1939, § 57.1801 as enacted by SL 1965, ch 287, § 1; SL 1983, ch 78.
10-33-4. Annual report of telephone company property--Date of filing.
The president, secretary, general manager, or superintendent of each telephone company not subject to the tax imposed by § 10-33-21 shall furnish to the Department of Revenue on or before April fifteenth, each year, a report under oath, on the forms furnished and according to the instructions issued by the department, with reference to the property owned, leased, or controlled on December thirty-first of the preceding calendar year.
Source: SDC 1939, § 57.1802; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 54, § 3.
10-33-5. Telephone lines listed in annual report--Description.
With reference to property without the limits of municipalities, exclusive of all exchanges or central office equipment, the statement required by § 10-33-4 shall show the following items:
(1) The counties of this state in which the company making the report owns or operates any line or lines, arranged in alphabetical order;
(2) The number of miles of pole lines, whether rural or toll or both and with a detailed description of the construction of such lines, and the cost of construction, together with the present or depreciated value of such line or lines in each county.
Source: SL 1915, ch 100, § 14; RC 1919, § 6622; SDC 1939, § 57.1802 (1); SL 1992, ch 60, § 2.
10-33-6. Telephone exchanges and other property listed in annual report--Description.
The report required by § 10-33-4 shall give the following items of information concerning any and all exchanges owned or operated by the reporting company:
(1) The location of all exchanges in each county, with the names of the municipalities in each county and the counties arranged in alphabetical order;
(2) A description in detail of the construction and equipment of each exchange, with the cost of construction and equipment, and the present or depreciated value;
(3) A description of each tract or parcel of real estate and any and all buildings thereon, owned and used exclusively for telephone purposes, with the present cash value of each tract and improvements thereon;
(4) The present cash value of any and all franchises or permits under which the reporting company does business in any municipality;
(5) All other property used exclusively in the operation and maintenance of the telephone business of the reporting company.
Source: SL 1915, ch 100, § 14; RC 1919, § 6622; SDC 1939, § 57.1802 (2); SL 1992, ch 60, § 2.
10-33-7. Capitalization and financial data listed in annual report.
The report required by § 10-33-4 shall show the following details concerning the financial organization and operation of the company:
(1) The amount of capital stock authorized and the amount issued as preferred stock or as common stock, with the present actual cash value of the same;
(2) All assets and liabilities;
(3) All receipts and disbursements.
Source: SL 1915, ch 100, § 14; RC 1919, § 6622; SDC 1939, § 57.1802 (3).
10-33-8. Additional information given in annual report.
The statement required by § 10-33-4 shall include such other facts and information as the Department of Revenue may require.
Source: SDC 1939, § 57.1802 (4); SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-33-9. Addition to assessable value for failure to file report.
In case any telephone company fails to make the report required by § 10-33-4, on or before April fifteenth of each year, the Department of Revenue in its discretion may add twenty-five percent to the assessable value of the property of such company.
Source: SDC 1939, § 57.1802; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-33-10. Operating property assessed for taxation by department.
All property, real and personal, which is actually and necessarily used in providing telephone and exchange service comprising rental and toll service by means of wired circuits and otherwise in this state, and which belongs to any telephone company in this state which is not subject to the tax imposed by § 10-33-21 shall be assessed for the purpose of taxation by the Department of Revenue, and not otherwise.
Source: SDC 1939, § 57.1801; SL 1941, ch 341; SL 1965, ch 287, § 1; SL 1974, ch 94, § 3; SL 1998, ch 67, § 1; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 54, § 4.
10-33-11. Time of property assessment--Information to be considered.
The Department of Revenue shall assess the property of all telephone companies not subject to the tax imposed by § 10-33-21 on the fifth day of July of each year. In making the assessment, the department shall consider all the reports, facts, information filed, with any other information obtainable, concerning the value of the property of all telephone companies and may add any property omitted from the return of the companies. In making the assessment, which shall be with reference to value and ownership on January first of the year for which the assessment is made, the department shall take into consideration, among other things, the amount of gross earnings and net incomes, and the value to each telephone company of its franchises, rights, and privileges, granted under the laws of this state to do business in this state.
Source: SDC 1939, § 57.1804; SL 1992, ch 60, § 2; SL 1996, ch 77, § 3; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 54, § 5.
10-33-13. Separate valuation of exchanges outside municipalities.
A separate valuation shall be made for each exchange not located within corporate limits, but such valuation or valuations shall be subject to the levy provided in § 10-33-17 for property without corporate limits.
Source: SL 1915, ch 100, § 17; RC 1919, § 6625; SDC 1939, § 57.1804.
10-33-14. Public Utilities Commission to provide information for uniform and fair taxation.
For the purpose of aiding the Department of Revenue in implementing the taxes imposed by this chapter, the Public Utilities Commission shall provide any information requested by the secretary and deemed necessary by the secretary to ensure uniform and fair taxation.
Source: SDC 1939, § 57.1803; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 54, § 6.
10-33-14.1. Considerations in determining fair market value of telephone company property.
For the purpose of determining the fair market value of the property of any telephone company not subject to the tax imposed by § 10-33-21, the Department of Revenue shall take into consideration the cost approach, the market approach, and the income approach to appraisal. In the market approach, the department shall consider the actual or market value of the shares of stock outstanding, the actual or market value of all bonds outstanding, and all other indebtedness as may be applicable for operating the company. In the income approach, the department may consider the company's growth rate and the rate of inflation in determining the capitalization rate. The department may take into consideration any other information or data of any kind or nature which the department may deem material in arriving at the fair market value of the property.
Source: SL 1996, ch 77, § 7; SL 1997, ch 61, § 5; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 54, § 7.
10-33-15. Notice of assessment and hearing date before secretary of revenue.
After the assessment is made on each company not subject to the tax imposed by § 10-33-21, the Department of Revenue shall give notice by mail to the officers of each telephone company making return to the department, setting out the assessment and fixing a date at least ten days in advance when the representatives of any telephone company, so desiring, may appear before the secretary of revenue and be heard in all matters relating to the correctness of the assessment of the property of the company. The secretary of revenue may promulgate rules pursuant to chapter 1-26 concerning the conduct of the hearings.
Source: SDC 1939, § 57.1804; SL 1987, ch 82, § 10; SL 1995, ch 56, § 4; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 54, § 8.
10-33-16. Equalization of assessments--Notice to company--Certification to county auditors.
After the date of hearing, and on or before the fourth Monday of August, the Department of Revenue shall finally equalize the assessment of each company not subject to the tax imposed by § 10-33-21 and notify each company by mail.
The department shall certify the value finally determined to the county auditor of each county in which the company assessed owns property.
Source: SDC 1939, § 57.1804; SL 1994, ch 73, § 33; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2011, ch 54, § 9.
10-33-17. Rates of taxation applied to telephone property.
All telephone property so assessed by the Department of Revenue shall be taxed in the following manner:
(1) Property within corporate limits shall be subject to all taxes that other property within the same corporate limits is subject to for the current year;
(2) Property without corporate limits shall be subject to a rate of taxation which shall be equal to the average rate of taxation borne by other property outside the corporate limits for the current year, which rate shall be the average rate of all state, county, school, municipal, road, bridge, and other local taxes on other property, which tax so levied and extended shall be in lieu of all other taxes.
Source: SDC 1939, § 57.1805; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-33-18. Extension of taxes to tax book--Duplicate to county treasurer--Collection of tax.
The county auditor shall extend the above-mentioned taxes against the assessment certified to him by the Department of Revenue in a book to be called "the telephone tax book," and shall make and deliver a duplicate of such telephone book to the county treasurer and the county treasurer shall be charged with the collection of such telephone tax.
Source: SDC 1939, § 57.1806; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-33-19. Collection of delinquent taxes.
All laws relating to the enforcement of the payment of delinquent taxes are applicable to each company not subject to the tax imposed by § 10-33-21.
Source: SL 1915, ch 100, § 20; RC 1919, § 6628; SDC 1939, § 57.1807; SL 2011, ch 54, § 10.
10-33-20. Distribution of tax proceeds--Tax receipt.
When taxes on telephone property located within a municipality are collected, the amount due each municipality, or school district shall be paid over by the county treasurer to the treasurer of such municipality, or school district and the treasurer shall credit the remainder to the several state and county funds. When collecting taxes on property located without the corporate limits of any municipality, the treasurer shall use a tax receipt to be called the "telephone tax receipt," and shall credit the proper amount to the state funds and the balance to the county general fund.
Source: SL 1915, ch 100, § 19; RC 1919, § 6627; SDC 1939, § 57.1806; SL 1992, ch 60, § 2.
10-33-21. Companies providing local exchange telephone service taxed on gross receipts--Rate--Minimum tax.
Each telephone company engaged in furnishing and providing telephone and exchange service comprising rental and toll service by means of wired circuits and otherwise shall be taxed on the basis of gross receipts at the rate of four percent. This tax does not apply to any company that does not provide local exchange telephone service to patrons.
However, no telephone company operating in this state may be taxed less than an amount equal to fifty cents per year per telephone serviced.
Source: SL 1955, ch 423, § 1; SDC Supp 1960, § 57.1808; SL 1965, ch 287, § 2; SL 1974, ch 94, § 1; SL 1980, ch 86; SL 2002, ch 58, § 1; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2004, ch 89, § 1; SL 2009, ch 46, § 1; SL 2011, ch 54, § 11.
10-33-22. Definition of company.
The term, company, means any person, corporation, cooperative, association, or other entity providing telephone and exchange service, rental and toll service.
Source: SL 1955, ch 423, § 1; SDC Supp 1960, § 57.1808; SL 1965, ch 287, § 2; SL 2004, ch 89, § 2.
10-33-24. Determination and certification of gross receipts tax payable to school districts.
The secretary of revenue shall compute and determine the amount of tax to be paid by each company as provided in § 10-33-21. The secretary shall on or before July first of each year certify to each school district in the state in which the company operates the amount of the tax to be paid to the school district on the basis of the gross receipts received by the company in each school district.
Source: SL 1955, ch 423, § 3; SDC Supp 1960, § 57.1810; SL 1965, ch 287, § 4; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2007, ch 52, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-33-25. Time of payment of gross receipts tax.
The tax levied in § 10-33-21 is due and payable to the secretary of revenue by August first of each year following the filing of the report of the gross receipts. The secretary of revenue shall distribute the taxes paid pursuant §§ 10-33-21 and 10-33-24 to each school district by September first of each year. The secretary of revenue shall approve vouchers and the state auditor shall draw warrants to pay each school district its share of the distribution.
Source: SL 1955, ch 423, § 3; SDC Supp 1960, § 57.1810; SL 1965, ch 287, § 4; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2007, ch 52, § 2; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-33-26. Gross receipts tax in lieu of tax on operating property--Sales and use taxes.
The tax imposed by § 10-33-21 shall be in lieu of all taxes levied by the state, counties, municipalities, townships, school districts, or other political subdivisions of the state on the personal and real property of the company which is used or intended for use in the furnishing and providing telephone and exchange service, rental and toll service, but shall not be in lieu of the retail occupational sales and use tax, and this chapter shall in no manner exempt such companies from the payment of such retail occupational sales and use tax.
Source: SL 1955, ch 423, § 3; SDC Supp 1960, § 57.1810; SL 1965, ch 287, § 4; SL 1992, ch 60, § 2.
10-33-27. Penalties for delinquency or failure to report--Collection by distress and sale.
If the tax levied under § 10-33-21 is not paid on the due date a penalty of up to five percent of the amount of the tax may be imposed for each month of delinquency, and if any telephone company fails to report its gross receipts to the secretary of revenue, the company may be penalized up to twenty-five percent of the tax due. Such tax may be enforced and collected by distress and sale of the personal and real property of such company in the same manner as is now provided for the collection of real property taxes and mobile home taxes pursuant to chapter 10-22. The tax levied under § 10-33-21 shall be administered pursuant to chapter 10-59, unless a contrary provision in this chapter applies.
Source: SL 1955, ch 423, § 4; SDC Supp 1960, § 57.1811; SL 1965, ch 287, § 5; SL 1992, ch 80, § 205; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2004, ch 89, § 3; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-33-29. Local taxation of nonoperating property permitted.
All property of such telephone company, both real and personal, not actually and necessarily used in the operation and maintenance of its lines in this state shall be considered "nonoperating property," and nothing in this chapter shall be so construed as to prevent local assessment and taxation of such "nonoperating property."
Source: SDC 1939, § 57.1801 as added by SL 1941, ch 341; SL 1965, ch 287, § 1.
10-33-30. Municipally owned utilities exempt.
This chapter shall have no application to a telephone utility owned and operated by a municipality.
Source: SL 1955, ch 423, § 7; SDC Supp 1960, § 57.1814.
