CHAPTER 10-45C
UNIFORM SALES AND USE TAX ADMINISTRATION ACT
10-45C-1 Definitions.
10-45C-2 Legislative findings.
10-45C-3 Authority to enter into agreement--Authority to implement--Promulgation of rules--Representatives.
10-45C-4 Relationship to state law.
10-45C-5 Agreement requirements.
10-45C-6 Cooperating sovereigns.
10-45C-7 Seller and third party liability.
10-45C-8 Short title.
10-45C-9 Seller registering to collect sales and use tax not liable for uncollected tax--Exception.
10-45C-10 Assessment for uncollected tax prohibited for period seller not registered if registration occurs as required.
10-45C-11 Provisions not applicable to matters relating to unresolved audits or paid taxes.
10-45C-12 Effectiveness of provisions of § 10-45C-9--Requirements--Tolling of statute of limitations.
10-45C-13 Provisions applicable to taxes due from seller in capacity as seller.
10-45C-14 10-45C-14, 10-45C-15. Repealed by SL 2015, ch 39, §§ 1, 2.
10-45C-1. Definitions.
Terms used in this chapter mean:
(1) "Agreement," the Streamlined Sales and Use Tax Agreement;
(2) "Certified automated system," software certified jointly by the states that are signatories to the agreement to calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit to the appropriate state, and maintain a record of the transaction;
(3) "Certified service provider," an agent certified jointly by the states that are signatories to the agreement to perform all of the seller's sales tax functions;
(4) "Person," an individual, trust, estate, fiduciary, partnership, limited liability company, limited liability partnership, corporation, or any other legal entity;
(5) "Sales tax," the tax levied under chapter 10-45;
(6) "Seller," any person making sales, leases, or rentals of tangible personal property, any product transferred electronically, or services;
(7) "State," any state of the United States and the District of Columbia; and
(8) "Use tax," the tax levied under chapter 10-46.
Source: SL 2002, ch 64, § 1; SL 2024, ch 39, § 8.
10-45C-2. Legislative findings.
The Legislature finds that this state should enter into an agreement with one or more states to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce.
Source: SL 2002, ch 64, § 2.
10-45C-3. Authority to enter into agreement--Authority to implement--Promulgation of rules--Representatives.
The Department of Revenue is authorized and directed to enter into the Streamlined Sales and Use Tax Agreement with one or more states to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce. In furtherance of the agreement, the Department of Revenue is authorized to act jointly with other states that are members of the agreement to establish standards for certification of a certified service provider and certified automated system and establish performance standards for multistate sellers.
The Department of Revenue is further authorized to take other actions reasonably required to implement the provisions set forth in this chapter. Other actions authorized by this chapter include, but are not limited to, the adoption of rules pursuant to chapter 1-26 consistent with the Department of Revenue's rule-making authority in §§ 10-45-47.1 and 10-46-35.1 and the joint procurement, with other member states, of goods and services in furtherance of the cooperative agreement.
The secretary of revenue or the secretary's designee and three legislators are authorized to represent this state before the other states that are signatories to the agreement. The Executive Board of the Legislative Research Council shall appoint the legislators to represent this state.
Source: SL 2002, ch 64, § 3; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2023, ch 33, § 1.
10-45C-4. Relationship to state law.
No provision of the agreement authorized by this chapter in whole or part invalidates or amends any provision of the law of this state. Adoption of the agreement by this state does not amend or modify any law of this state. Implementation of any condition of the agreement in this state, whether adopted before, at, or after membership of this state in the agreement, must be by the action of this state.
Source: SL 2002, ch 64, § 4.
10-45C-5. Agreement requirements.
The Department of Revenue shall not enter into the Streamlined Sales and Use Tax Agreement unless the agreement requires each state to abide by the following requirements:
(a) The agreement must set restrictions to achieve over time more uniform state rates through the following:
(1) Limiting the number of state rates.
(2) Limiting the application of maximums on the amount of state tax that is due on a transaction.
(3) Limiting the application of thresholds on the application of state tax.
(b) The agreement must establish uniform standards for the following:
(1) The sourcing of transactions to taxing jurisdictions.
(2) The administration of exempt sales.
(3) The allowances a seller may take for bad debts.
(4) Sales and use tax returns and remittances.
(c) The agreement must require states to develop and adopt uniform definitions of sales and use tax terms. The definitions must enable a state to preserve its ability to make policy choices not inconsistent with the uniform definitions.
(d) The agreement must provide a central, electronic registration system that allows a seller to register to collect and remit sales and use taxes for all signatory states.
(e) The agreement must provide that registration with the central registration system and the collection of sales and use taxes in the signatory states will not be used as a factor in determining whether the seller has nexus with a state for any tax.
(f) The agreement must provide for reduction of the burdens of complying with local sales and use taxes through the following:
(1) Restricting variances between the state and local tax bases.
(2) Requiring states to administer any sales and use taxes levied by local jurisdictions within the state so that sellers collecting and remitting these taxes will not have to register or file returns with, remit funds to, or be subject to independent audits from local taxing jurisdictions.
(3) Restricting the frequency of changes in the local sales and use tax rates and setting effective dates for the application of local jurisdictional boundary changes to local sales and use taxes.
(4) Providing notice of changes in local sales and use tax rates and of changes in the boundaries of local taxing jurisdictions.
(g) The agreement must outline any monetary allowances that are to be provided by the states to sellers or certified service providers.
(h) The agreement must require each state to certify compliance with the terms of the agreement prior to joining and to maintain compliance, under the laws of the member state, with all provision of the agreement while a member.
(i) The agreement must require each state to adopt a uniform policy for certified service providers that protects the privacy of consumers and maintains the confidentiality of tax information.
(j) The agreement must provide for the appointment of an advisory council of private sector representatives and an advisory council of nonmember state representatives to consult with in the administration of the agreement.
Source: SL 2002, ch 64, § 5; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-45C-6. Cooperating sovereigns.
The agreement authorized by this chapter is an accord among individual cooperating sovereigns in furtherance of their governmental functions. The agreement provides a mechanism among the member states to establish and maintain a cooperative, simplified system for the application and administration of sales and use taxes under the duly adopted law of each member state.
Source: SL 2002, ch 64, § 6.
10-45C-7. Seller and third party liability.
A certified service provider is the agent of a seller, with whom the certified service provider has contracted, for the collection and remittance of sales and use taxes. As the seller's agent, the certified service provider is liable for sales and use tax due each member state on all sales transactions it processes for the seller except as set out in this section.
A seller that contracts with a certified service provider is not liable to the state for sales or use tax due on transactions processed by the certified service provider unless the seller misrepresented the type of items it sells or committed fraud. In the absence of probable cause to believe that the seller has committed fraud or made a material misrepresentation, the seller is not subject to audit on the transactions processed by the certified service provider. A seller is subject to audit for transactions not processed by the certified service provider. The member states acting jointly may perform a system check of the seller and review the seller's procedures to determine if the certified service provider's system is functioning properly and the extent to which the seller's transactions are being processed by the certified service provider.
A person that provides a certified automated system is responsible for the proper functioning of that system and is liable to the state for underpayments of tax attributable to errors in the functioning of the certified automated system. A seller that uses a certified automated system remains responsible and is liable to the state for reporting and remitting tax.
A seller that has a proprietary system for determining the amount of tax due on transactions and has signed an agreement establishing a performance standard for that system is liable for the failure of the system to meet the performance standard.
Source: SL 2002, ch 64, § 7.
10-45C-8. Short title.
This chapter shall be known as and referred to as the Uniform Sales and Use Tax Administration Act.
Source: SL 2002, ch 64, § 8.
10-45C-9. Seller registering to collect sales and use tax not liable for uncollected tax--Exception.
No seller who registers to pay or to collect and remit applicable South Dakota sales or use tax in accordance with the terms of the Streamlined Sales and Use Tax Agreement is liable for any uncollected or unpaid sales or use tax, penalty or interest, unless the seller was registered in this state during the twelve-month period preceding the date the state is found in compliance with the Streamlined Sales and Use Tax Agreement. For any seller who is not obligated to collect and remit the tax imposed under chapters 10-45, 10-46, or 10-52, the amnesty period provided by this section ends twelve months after the date the Streamlined Sales Tax Governing Board has determined that adequate certified service providers and certified automated systems are available.
Source: SL 2005, ch 81, § 1; SL 2006, ch 54, § 1.
10-45C-10. Assessment for uncollected tax prohibited for period seller not registered if registration occurs as required.
The provisions of § 10-45C-9 preclude assessment for any uncollected or unpaid sales or use tax, penalty, or interest for sales made during the period the seller was not registered in the state, if registration occurs within twelve months of the date the state is found in compliance with the Streamlined Sales and Use Tax Agreement.
Source: SL 2005, ch 81, § 2.
10-45C-11. Provisions not applicable to matters relating to unresolved audits or paid taxes.
The provisions of § 10-45C-9 do not apply to any seller with respect to any matter or matters for which the seller received notice of the commencement of an audit and the audit is not yet finally resolved, including any related administrative and judicial processes. The provisions of § 10-45C-9 do not apply to any sales or use taxes already paid or remitted to the state or to taxes collected by the seller.
Source: SL 2005, ch 81, § 3.
10-45C-12. Effectiveness of provisions of § 10-45C-9--Requirements--Tolling of statute of limitations.
Absent the seller's fraud or intentional misrepresentation of a material fact, the provisions of § 10-45C-9 are fully effective, if the seller remains registered and continues payment or collection and remittance of applicable sales or use taxes for a period of at least thirty-six months from the date of the seller's original registration. The state's statute of limitations applicable to asserting a tax liability is tolled during this thirty-six month period.
Source: SL 2005, ch 81, § 4.
10-45C-13. Provisions applicable to taxes due from seller in capacity as seller.
The provisions of § 10-45C-9 are applicable only to sales or use taxes due from a seller in its capacity as a seller and not to sales or use taxes due from a seller in its capacity as a buyer.
Source: SL 2005, ch 81, § 5.
