CHAPTER 10-33A
TAXATION OF TELECOMMUNICATIONS COMPANIES
10-33A-1 Definitions.
10-33A-2 "Telecommunications service" defined.
10-33A-3 Gross receipts defined.
10-33A-4 Tax imposed on gross receipts of certain telecommunications services--Amount--Mobile telecommunications services excepted.
10-33A-5 10-33A-5. Repealed by SL 2005, ch 65, § 4, eff. March 7, 2005.
10-33A-5.1 Disposition of revenues--County telecommunications gross receipts fund created.
10-33A-6 10-33A-6. Repealed by SL 2005, ch 65, § 5, eff. March 7, 2005.
10-33A-6.1 Distribution of moneys.
10-33A-7 Companies subject to tax to apply for tax license--Contents.
10-33A-8 Issuance of tax license--Validity.
10-33A-9 Refusal of tax license to persons delinquent on other state taxes--Bond or security may be required.
10-33A-10 10-33A-10. Repealed by SL 2006, ch 61, § 7, eff. Feb. 6, 2006.
10-33A-10.1 Filing return and remitting tax--Time for filing and remittance--Extension--Penalty for untimely return or remittance.
10-33A-11 10-33A-11. Repealed by SL 2010, ch 69, § 3.
10-33A-12 Appeal.
10-33A-13 10-33A-13. Repealed by SL 2010, ch 69, § 4.
10-33A-14 Uncollectible debts may be deducted from gross receipts--Subsequent collection subject to tax.
10-33A-15 Records to be kept by company--Subject to inspection--Retention period.
10-33A-16 Promulgation of rules--Scope.
10-33A-17 Violation of chapter as criminal offense--Classification.
10-33A-18 Personal liability of officers, managers, or partners of entity failing to file returns or pay tax--Security in lieu of liability--Bonded municipal officials exempt.
10-33A-19 Certain property of telecommunications company exempt from property taxes.
10-33A-20 Chapter not applicable to certain tax-exempt property.
10-33A-1. Definitions.
Terms used in this chapter mean:
(1) "Department," the South Dakota Department of Revenue;
(2) "Engaging in business," carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit;
(3) "Secretary," the secretary of the Department of Revenue;
(4) "Telecommunications company," any person, as defined by § 2-14-2, trustee, lessee, receiver, or municipality providing any telecommunications service as defined in § 10-33A-2;
(5) "Telecommunications gross receipts tax," the gross receipts tax imposed by this chapter.
Source: SL 2003, ch 58, § 1; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-33A-2. "Telecommunications service" defined.
The term, telecommunications service, as used in this chapter, means wireless personal communications services, wireless local loop services, enhanced special mobile radio services, fixed wireless services, and cellular services that provide two-way communication. The term, telecommunications service, does not include the provision of terminal equipment used to originate or terminate such service. The term, telecommunications service, does not include specialized mobile radio service, non-network two-way radio telephone service, private mobile radio service, one-way cable television service, or two-way cable system subscriber interaction that may be required for the selection of video or other programing services.
Source: SL 2003, ch 58, § 2.
10-33A-3. Gross receipts defined.
The term, gross receipts, as used in this chapter, includes only revenue of a telecommunications company from the sale at retail of intrastate and interstate telecommunications services. Sale at retail does not include special access or toll-free incoming calls or the sale of any telecommunications service by a telecommunications company to another telecommunications company if the service is resold or becomes a component part of the sale by the second telecommunications company. Any hospital, hotel, motel, or place that provides temporary accommodations selling telecommunications services to its patients or guests is not a telecommunications company for the purposes of this chapter.
Source: SL 2003, ch 58, § 3.
10-33A-4. Tax imposed on gross receipts of certain telecommunications services--Amount--Mobile telecommunications services excepted.
There is hereby imposed a tax of four percent upon the gross receipts of telecommunications services, as defined in § 10-33A-2, that originate and terminate in the same state and are billed to a customer with a place of primary use in this state or are deemed to have originated or been received in this state and to be billed or charged to a service address in this state if the customer's place of primary use is located in this state regardless of where the service actually originates or terminates. Notwithstanding any other provision of this chapter and for purposes of the tax imposed by this section, the tax imposed upon mobile telecommunication services shall be administered in accordance with 4 U.S.C. §§ 116-126 as of July 28, 2000.
Source: SL 2003, ch 58, § 4.
10-33A-5.1. Disposition of revenues--County telecommunications gross receipts fund created.
The secretary shall deposit sixty percent of the revenue collected from the tax imposed by this chapter into the general fund and forty percent of the revenue collected from the tax imposed by this chapter into the county telecommunications gross receipts fund. There is hereby created in the state treasury the county telecommunications gross receipts fund.
Source: SL 2005, ch 65, § 1, eff. July 1, 2003; SL 2015, ch 39, § 10.
10-33A-6.1. Distribution of moneys.
The secretary shall distribute to each county an amount equal to the money deposited in the county telecommunications gross receipts fund times the ratio of population of the county to the total population of all counties. The secretary shall base the allocation of money on the most recent decennial census of the United States Department of Commerce, Bureau of the Census. The secretary shall make distributions from the county telecommunications gross receipts fund each March, June, September, and December. The secretary shall approve vouchers and the state auditor shall draw warrants to pay each county its share of the distribution.
Source: SL 2005, ch 65, § 2.
10-33A-7. Companies subject to tax to apply for tax license--Contents.
Any telecommunications company engaging in a business in this state whose gross receipts from telecommunications services are subject to the telecommunications gross receipts tax shall file with the department, an application for a telecommunications gross receipts tax license. An application for a license shall be made upon a form prescribed by the secretary and shall set forth the name under which the applicant transacts or intends to transact business, the location of the place of business, and such other information as the secretary may require. The application shall be signed by the owner, if a natural person; in the case of an association or partnership, by a member or partner thereof; or in the case of a corporation or a municipality, by an executive officer thereof or some person specifically authorized by the corporation or the municipality to sign the application, to which shall be attached the written evidence of the person's authority.
Source: SL 2003, ch 58, § 7.
10-33A-8. Issuance of tax license--Validity.
The secretary shall grant and issue to each applicant a telecommunications gross receipts tax license. A license is not assignable and is valid only for the telecommunications company to which it was issued. Any license issued is valid and effective without further payment of fees until canceled or revoked.
Source: SL 2003, ch 58, § 8.
10-33A-9. Refusal of tax license to persons delinquent on other state taxes--Bond or security may be required.
The secretary may refuse to issue a telecommunications gross receipts tax license to any person who is delinquent in payment of other taxes levied by the State of South Dakota. The secretary may also require an applicant to furnish to the state a bond, or other adequate security, as security for payment of any gross receipts tax that may become due, or require a bond or security as a condition precedent to remaining in business as a telecommunications company.
Source: SL 2003, ch 58, § 9.
10-33A-10.1. Filing return and remitting tax--Time for filing and remittance--Extension--Penalty for untimely return or remittance.
Any person who holds a license issued pursuant to this chapter or who is a person whose receipts are subject to the tax imposed by this chapter shall, except as otherwise provided in this section, file a return, and pay any tax due, to the Department of Revenue on or before the twentieth day of the month following each monthly period. The return shall be filed on forms prescribed and furnished by the department.
If the person remits the tax by electronic transfer to the state, the person shall file the return by electronic means on or before the twentieth day of the month following each period and remit the tax on or before the twenty-fifth day of the month following each period.
The secretary may require or allow a person to file a return, and pay any tax due, on a basis other than monthly. The return and remittance is due the twentieth day of the month following the reporting period or at a time otherwise determined by the secretary.
The secretary may grant an extension of not more than five days for filing a return and remittance.
Unless an extension is granted, penalty or interest under § 10-59-6 shall be paid if a return or remittance is not made on time.
Source: SL 2007, ch 65, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2017, ch 65, § 9.
10-33A-12. Appeal.
Any appeal from a decision of the secretary in a contested case shall be taken in accordance with chapter 1-26.
Source: SL 2003, ch 58, § 12.
10-33A-14. Uncollectible debts may be deducted from gross receipts--Subsequent collection subject to tax.
Any refund or allowance made by any telecommunication service or any amount written off the books of a telecommunications company reporting financial information on an accrual basis may be reported as an uncollectible debt and deducted from the gross receipts of any telecommunications service. If any uncollectible debt is subsequently collected, the amount is subject to the telecommunications gross receipts tax and shall be reported to the department in the month of collection.
Source: SL 2003, ch 58, § 14.
10-33A-15. Records to be kept by company--Subject to inspection--Retention period.
Any telecommunications company subject to the telecommunications gross receipts tax shall keep records of all receipts and telecommunications service sales. The records are, at all times during business hours of the day, subject to inspection by the department to determine the amount of tax due. The records shall be preserved for a period of three years unless the secretary, in writing, authorized their destruction or disposal at an earlier date.
Source: SL 2003, ch 58, § 15.
10-33A-16. Promulgation of rules--Scope.
The secretary may promulgate rules, pursuant to chapter 1-26, concerning:
(1) Telecommunications tax licensing, including bonding and filing license applications;
(2) The filing of returns and payment of the tax;
(3) Determining the application of the telecommunications tax and exemptions;
(4) Taxpayer record-keeping requirements; and
(5) Determining auditing methods.
Source: SL 2003, ch 58, § 16.
10-33A-17. Violation of chapter as criminal offense--Classification.
Any person who:
(1) Makes any false or fraudulent return in attempting to defeat or evade the telecommunications gross receipts tax is guilty of a Class 6 felony;
(2) Fails to pay the telecommunications gross receipts tax due under this chapter within sixty days from the date the tax becomes due is guilty of a Class 1 misdemeanor;
(3) Fails to keep the records required by this chapter or refuses to exhibit these records to the department for the purpose of examination is guilty of a Class 1 misdemeanor;
(4) Fails to file a return required by this chapter within sixty days from the date the return is due is guilty of a Class 1 misdemeanor;
(5) Engages in business as a telecommunications company under this chapter without obtaining a telecommunications gross receipts tax license is guilty of a Class 1 misdemeanor;
(6) Engages in business as a telecommunications company under this chapter after the company's telecommunications gross receipts tax license has been revoked or canceled by the secretary is guilty of a Class 6 felony;
(7) Willfully violates any rule of the secretary for the administration and enforcement of the provisions of this chapter is guilty of a Class 1 misdemeanor;
(8) Violates either subdivision (2) or subdivision (4) of this section two or more times in any twelve-month period is guilty of a Class 6 felony; or
(9) Engages in business as a telecommunications company under this chapter without obtaining a telecommunications gross receipts tax license after having been notified in writing by the secretary that the telecommunications company is subject to the provisions of this chapter is guilty of a Class 6 felony. However, it is not a violation of this subdivision if the telecommunications company providing any telecommunications service files an application for a telecommunications gross receipts tax license and meets all lawful prerequisites for obtaining such license within three days from receipt of written notice from the secretary.
For purposes of this section, the term, person, includes corporate officers, member-managers or managers of limited liability companies, or partners that control, supervise, or are charged with the responsibility of filing tax returns or remitting tax payments pursuant to this chapter.
Source: SL 2003, ch 58, § 17; SL 2004, ch 96, § 6; SL 2009, ch 49, § 9.
10-33A-18. Personal liability of officers, managers, or partners of entity failing to file returns or pay tax--Security in lieu of liability--Bonded municipal officials exempt.
If a corporation, limited liability company, limited partnership, limited liability partnership, or limited liability limited partnership subject to the gross receipts tax under this chapter fails for any reason to file the required returns or to pay the tax due, any of the corporate officers, member-managers or managers of limited liability companies, or partners of partnerships that control, supervise, or are charged with the responsibility of filing the returns or remitting tax payments are personally liable for the failure. The dissolution of a corporation, limited liability company, limited partnership, limited liability partnership, or limited liability limited partnership does not discharge an officer, member-manager, manager, or partner's liability for a prior failure of the corporation, limited liability company, limited partnership, limited liability partnership, or limited liability limited partnership to file a return or remit the tax due. The sum due for such a liability may be assessed and collected as provided by law.
If the responsible corporate officers, limited liability company member-managers, managers, or partners elect not to be personally liable for the failure to file the required returns or to pay the tax due, the corporation, limited liability company, limited partnership, limited liability partnership, or limited liability limited partnership shall provide the department with a surety bond or certificate of deposit as security for payment of any tax that may become due. The bond or certificate of deposit provided for in this section shall be in an amount equal to the estimated annual gross receipts multiplied by the applicable sales or gross receipts tax rate. This section does not apply to elected or appointed officials of a municipality if bonded pursuant to §§ 9-14-6 and 9-14-6.1.
Source: SL 2003, ch 58, § 18; SL 2009, ch 49, § 10.
10-33A-19. Certain property of telecommunications company exempt from property taxes.
Any real and personal property owned by a telecommunications company that is used or intended for use in furnishing and providing telecommunication services is exempt from real and personal property taxes levied by the state, counties, municipalities, townships, or other political subdivisions of the state.
Source: SL 2003, ch 58, § 19.
10-33A-20. Chapter not applicable to certain tax-exempt property.
The provisions of this chapter do not apply to any property exempt from taxation pursuant to S.D. Const., Art. XI, § 5.
Source: SL 2003, ch 58, § 20.
