10-45-1. Definition of terms.
Terms used in this chapter mean:
(1) "Agricultural purposes," the producing, raising, growing, or harvesting of food or fiber upon agricultural land, including dairy products, livestock, and crops. The services of custom harvesters, chemical applicators, fertilizer spreaders, hay grinders, and cultivators are considered agricultural purposes. The harvesting of timber on land within the state is considered an agricultural purpose;
(2) "Business," any activity engaged in by any person or caused to be engaged in by such person with the object of gain, benefit, or advantage, either direct or indirect;
(3) "Candy," any preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops, or pieces. The term, candy, does not include any preparation containing flour and does not require refrigeration;
(4) "Delivery charges," charges by the retailer for preparation and delivery to a location designated by the purchaser of tangible personal property, any product transferred electronically, or services including transportation, shipping, postage, handling, crating, and packing. The term does not include postage for direct mail;
(5) "Food" and "food ingredient," any substance, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that is sold for ingestion or chewing by humans and is consumed for its taste or nutritional value. The term, food, does not include alcoholic beverages, tobacco, or prepared food;
(6) Repealed by SL 2007, ch 56, § 1.
(7) "Person," any individual, firm, copartnership, joint adventure, association, limited liability company, corporation, municipal corporation, estate, trust, business trust, receiver, the State of South Dakota and its political subdivisions, or any group or combination acting as a unit;
(8) "Prepared food," any food sold in a heated state or heated by the seller; two or more food ingredients mixed or combined by the seller for sale as a single item; or food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food.
Prepared food does not include food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the Food and Drug Administration in chapter 3, part 401.11 of its Food Code as of January 1, 2003, so as to prevent food borne illnesses;
(8A) "Product transferred electronically," any product obtained by the purchaser by means other than tangible storage media. A product transferred electronically does not include any intangible such as a patent, stock, bond, goodwill, trademark, franchise, or copyright.
(9) "Relief agency," the state, and county, municipality or district thereof, or any agency engaged in actual relief work;
(10) "Retail sale" or "sale at retail," any sale, lease, or rental for any purpose other than for resale, sublease, or subrent;
(11) "Retailer," any person engaged in the business of selling tangible goods, wares, or merchandise at retail, or the furnishing of gas, electricity, water, and communication service, and tickets or admissions to places of amusement and athletic events as provided in this chapter, and the sale at retail of products transferred electronically. The term also includes any person subject to the tax imposed by §§ 10-45-4 and 10-45-5. The isolated or occasional sale of tangible personal property or any product transferred electronically at retail by a person who does not hold himself or herself out as engaging in the business of selling such tangible personal property or products transferred electronically at retail does not constitute such person a retailer;
(12) "Sale," any transfer, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, for a consideration;
(13) "Soft drinks," any nonalcoholic beverages that contain natural or artificial sweeteners. The term, soft drinks, does not include any beverage that contains milk or milk products, soy, rice of similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by volume;
(14) "Tangible personal property," personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. The term includes electricity, water, gas, steam, and prewritten computer software.
Source: SDC 1939, § 57.3101; SL 1979, ch 84, § 6; SL 1980, ch 93; SL 1989, ch 102; SL 1989, ch 103; SL 1990, ch 87; SL 1994, ch 96, § 1; SL 1994, ch 351, § 24; SL 1995, ch 68, § 1; SL 1996, ch 87; SL 2002, ch 64, § 13; SL 2003, ch 61, § 1; SL 2004, ch 187, § 5; SL 2005, ch 69, § 1; SL 2005, ch 70, § 1; SL 2007, ch 56, § 1; SL 2008, ch 51, §§ 2 to 4; SL 2010, ch 59, § 3; SL 2016, ch 64, § 1.
10-45-1.1. Gross receipts not to include late charge fees.
For purposes of the tax imposed by this chapter, gross receipts do not include any fees or other interest imposed by a retailer for late charges on overdue accounts, no account, or nonsufficient funds checks.
Source: SL 2002, ch 64, § 14.
10-45-1.2. Gross receipts not to include refunded sale price of property.
For purposes of the tax imposed by this chapter, the sale price of property returned by customers are not gross receipts if the full sale price thereof is refunded either in cash or by credit.
Source: SL 2002, ch 64, § 15.
10-45-1.3. Gross receipts not to include credit or trade-in value of certain personal property.
For purposes of the tax imposed by this chapter, if any tangible personal property or any product transferred electronically is taken in trade or in a series of trades as a credit or part payment of a retail sale taxable under this chapter, and the tangible personal property or the product transferred electronically taken in trade is subject to the sales tax imposed by this chapter when sold, the credit or trade-in value allowed by the retailer may not be included as gross receipts.
Source: SL 2002, ch 64, § 16; SL 2008, ch 51, § 5.
10-45-1.4. Computation of tax to third decimal place.
In computing the tax to be remitted under this chapter as the result of any transaction, the tax amount shall be carried to the third decimal place. Amounts of tax less than one-half of one cent shall be disregarded and amounts of tax of one-half cent or more shall be considered an additional cent.
Source: SL 2002, ch 64, § 24.
10-45-1.5. Lease or rental defined--Exclusions.
For the purposes of the tax imposed by this chapter, the term, lease or rental, means any transfer of possession or control of tangible personal property or any product transferred electronically for a fixed or indeterminate term for consideration. A lease or rental may include future options to purchase or extend. Lease or rental does not include:
(1) A transfer of possession or control of property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments;
(2) A transfer or possession or control of property under an agreement that requires the transfer of title upon completion of required payments and payment of an option price does not exceed the greater of one hundred dollars or one percent of the total required payments; or
(3) Providing tangible personal property along with an operator for a fixed or indeterminate period of time. A condition of this exclusion is that the operator is necessary for the equipment to perform as designed. For the purpose of this subdivision, an operator shall do more than maintain, inspect, or set-up the tangible personal property.
Source: SL 2003, ch 61, § 2; SL 2008, ch 51, § 6.
10-45-1.6. Exemption for gross receipts pursuant to contract requiring retailer to display products or signage--Exception.
There are hereby exempted from the provisions of this chapter and the tax imposed by it, gross receipts received by a retailer from a manufacturer, wholesaler, or distributor pursuant to a written contract between the retailer and manufacturer, wholesaler, or distributor that requires the retailer to display the manufacturer, wholesaler, or distributor's product or signage in a specified manner or location. Any discount or deferred payment received by a retailer from a distributor, wholesaler, or manufacturer for purchasing a product for sale at retail does not constitute gross receipts subject to the tax imposed by this chapter.
Source: SL 2003, ch 62, § 1.
10-45-1.7. Certain nontaxable portions of bundled telecommunications transactions subject to tax.
In the case of a bundled transaction that includes any of the following: telecommunications services, ancillary services, internet access, or audio or video programming services and the charges are attributable to retail sales that are taxable and retail sales that are nontaxable, the portion of the price attributable to the nontaxable retail sales is subject to tax unless the provider can identify by reasonable and verifiable standards such portion from its books and records kept in the regular course of business.
Source: SL 2003, ch 64, § 1; SL 2007, ch 57, § 1.
10-45-1.8. Entire gross receipts from sale of bundled transactions subject to tax.
Except for the provisions of § 10-45-1.7, the tax imposed by this chapter applies to the entire gross receipts resulting from the sale of bundled transactions.
Source: SL 2007, ch 58, § 1.
10-45-1.9. Bundled transaction defined.
For the purposes of this chapter, the term, bundled transaction, means the retail sale of two or more distinct and identifiable products sold for one nonitemized price.
Source: SL 2007, ch 58, § 2.
10-45-1.10. Distinct and identifiable products--Exclusions.
For the purposes of this chapter, the phrase, distinct and identifiable products, does not include:
(1) Packaging, including containers, boxes, sacks, bags, bottles, wrapping, labels, tags, and instruction guides, that accompany the retail sale of the products and are incidental or immaterial to the retail sale;
(2) A product provided free of charge with the required purchase of another product, if the sales price of the product purchased does not vary depending on the inclusion of the product provided free of charge; or
(3) Items included in gross receipts.
Source: SL 2007, ch 58, § 3.
10-45-1.11. One nonitemized price--Exclusions.
For the purposes of this chapter, the phrase, one nonitemized price, does not include a price that is separately identified by product on binding sales or other supporting sales-related documentation made available to the customer in paper or electronic form including an invoice, bill of sale, receipt, contract, service agreement, lease agreement, periodic notice of rates and services, rate card, or price list.
Source: SL 2007, ch 58, § 4.
10-45-1.12. Bundled transaction--Exclusions.
For the purposes of this chapter, the term, bundled transaction, does not include:
(1) A transaction that includes the retail sale of real property or services to real property;
(2) A transaction that includes the retail sale of any products in which the gross receipts varies, or is negotiable, based on the selection by the purchaser of the products included in the transaction;
(3) A transaction that includes the retail sale of tangible personal property and a service where the tangible personal property is essential to the use of the service, and is provided exclusively in connection with the service, and the true object of the transaction is the service;
(4) A transaction that includes the retail sale of any product transferred electronically and a service where the product transferred electronically is essential to the use of the service, and is provided exclusively in connection with the service, and the true object of the transaction is the service;
(5) A transaction that includes the retail sale of services where one service is provided that is essential to the use or receipt of a second service and the first service is provided exclusively in connection with the second service and the true object of the transaction is the second service;
(6) A transaction that includes the retail sale of taxable products and nontaxable products and the purchase price or gross receipts of the taxable products is de minimis; or
(7) A transaction that includes the retail sale of exempt tangible personal property and taxable tangible personal property where:
(a) The transaction includes food and food ingredients, drugs, durable medical equipment, mobility enhancing equipment, or prosthetic devices all as defined in chapter 10-45, or over-the-counter drugs or medical supplies; and
(b) The retailer's purchase price or gross receipts of the taxable tangible personal property is fifty percent or less of the total purchase price or gross receipts of the bundled tangible personal property. No retailer may use a combination of the purchase price and gross receipts of the tangible personal property when making the fifty percent determination for a transaction.
Source: SL 2007, ch 58, § 5; SL 2008, ch 51, § 7.
10-45-1.13. De minimis defined.
For the purposes of § 10-45-1.12, the term, de minimis, means the retailer's purchase price or gross receipts of the taxable products is ten percent or less of the total purchase price or gross receipts of the bundled products. A retailer shall use either the purchase price or the gross receipts of the products to determine if the taxable products are de minimis. No retailer may use a combination of the purchase price and gross receipts of the products to determine if the taxable products are de minimis. A retailer shall use the full term of a service contract to determine if the taxable products are de minimis.
Source: SL 2007, ch 58, § 6.
10-45-1.14. Gross receipts defined.
For the purposes of this chapter, the term, gross receipts, means the total amount or consideration, including cash, credit, property, and services, for which tangible personal property, any product transferred electronically, or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:
(1) The retailer's cost of the property or service sold;
(2) The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the retailer, all taxes imposed on the retailer, and any other expense of the retailer; and
(3) Except as provided in chapter 10-46A or 10-46B, charges by the retailer for any services necessary to complete the sale whether or not separately stated, including delivery charges.
Source: SL 2007, ch 56, § 2; SL 2008, ch 51, § 8.
10-45-1.15. Conditions under which gross receipts include consideration retailer received from third parties.
Gross receipts, as defined in § 10-45-1.14, include consideration received by the retailer from third parties if:
(1) The retailer actually receives consideration from a party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;
(2) The retailer has an obligation to pass the price reduction or discount through to the purchaser;
(3) The amount of the consideration attributable to the sale is fixed and determined by the retailer at the time of the sale of the item to the purchaser; and
(4) One of the following criteria is met:
(a) The purchaser presents a coupon, certificate, or other documentation to the retailer to claim a price reduction or discount where the coupon, certificate, or documentation is authorized, distributed, or granted by a third party with the understanding that the third party will reimburse any retailer to whom the coupon, certificate, or documentation is presented;
(b) The purchaser identifies himself or herself to the retailer as a member of a group or organization entitled to a price reduction or discount (a preferred customer card that is available to any patron does not constitute membership in such a group); or
(c) The price reduction or discount is identified as a third party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser.
For the purposes of this section, the purchaser is the end consumer.
Source: SL 2007, ch 56, § 3.
10-45-1.16. Exclusions from definition of gross receipts.
Gross receipts, as defined in § 10-45-1.14, do not include:
(1) Discounts, including cash, term, or coupons that are not reimbursed by a third party that are allowed by a retailer and taken by a purchaser on a sale;
(2) Interest, financing, and carrying charges from credit extended on the sale of tangible personal property, any product transferred electronically, or services, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser; and
(3) Any taxes legally imposed directly on the consumer that are separately stated on the invoice, bill of sale, or similar document given to the purchaser.
Source: SL 2007, ch 56, § 4; SL 2008, ch 51, § 9.
10-45-1.17. Telecommunications service defined.
The term, telecommunications service, as used in this chapter, means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points. The term, telecommunications service, includes such transmission, conveyance, or routing in which computer processing applications are used to act on the form, code, or protocol of the content for purposes of transmission, conveyance, or routing without regard to whether such service is referred to as voice over internet protocol services or is classified by the Federal Communications Commission as enhanced or value added.
The term, telecommunications service, does not include:
(1) Data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where such purchaser's primary purpose for the underlying transaction is the processed data or information;
(2) Installation or maintenance of wiring or equipment on a customer's premises;
(3) Tangible personal property;
(4) Advertising, including directory advertising;
(5) Billing and collection services provided to third parties;
(6) Internet access service;
(7) Radio and television audio and video programming services, regardless of the medium, including the furnishing of transmission, conveyance and routing of such services by the programming service provider. Radio and television audio and video programming services shall include but not be limited to cable service as defined in 47 USC 522(6), as of June 1, 2007, and audio and video programming services delivered by commercial mobile radio service providers, as defined in 47 CFR 20.3;
(8) Ancillary services; or
(9) Digital products delivered electronically, including but not limited to software, music, video, reading materials, or ring tones.
The term, telecommunications service, includes the following services:
(1) "800 service," any telecommunications service that allows a caller to dial a toll-free number without incurring a charge for the call;
(2) "900 service," an inbound toll telecommunications service purchased by a subscriber that allows the subscriber's customers to call in to the subscriber's prerecorded announcement or live service. A 900 service does not include the charge for the collection of services provided by the seller of the telecommunications services to the subscriber or service or product sold by the subscriber to the subscriber's customer;
(3) "Fixed wireless service," a telecommunications service that provides radio communication between fixed points;
(4) "Mobile wireless service," a telecommunications service that is transmitted, conveyed, or routed regardless of the technology used, where either the origination point or termination point, or both, of the transmission, conveyance, or routing are not fixed;
(5) "Paging service," a telecommunications service that provides transmission of coded radio signals for the purpose of activation specific pages. Such transmissions may include either messages or sounds, or both;
(6) "Prepaid calling service," the right to access exclusively telecommunications services, which must be paid for in advance and which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount;
(7) "Prepaid wireless calling service," a telecommunications service that provides the right to utilize mobile wireless service as well as other nontelecommunications services, including the download of digital products delivered electronically, content and ancillary services, which must be paid for in advance that is sold in predetermined units or dollars of which the number declines with use in a known amount;
(8) "Private communication service," a telecommunications service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels; and
(9) "Value-added non-voice data service," a service that otherwise meets the definition of telecommunications services in which computer processing applications are used to act on the form, content, code, or protocol of the information or data primarily for a purpose other than transmission, conveyance, or routing.
Source: SL 2008, ch 52, § 2; SL 2009, ch 47, § 1.
10-45-1.18. Definition of terms related to telecommunications service and ancillary services.
Terms used in this chapter mean:
(1) "Intrastate telecommunications service," a telecommunications service that originates in one United States state or a United States territory or possession, and terminates in the same United States state or a United States territory or possession;
(2) "Interstate telecommunications service," a telecommunications service that originates in one United States state, or a United States territory or possession, and terminates in a different United States state or a United States territory or possession;
(3) "International telecommunications service," a telecommunications service that originates or terminates in the United States and terminates or originates outside the United States, respectively. United States includes the District of Columbia or a United States territory or possession;
(4) "Ancillary services," services that are associated with or incidental to the provision of telecommunications services, including detailed telecommunications billing, directory assistance, vertical service, and voice mail services;
(5) "Detailed telecommunications billing service," an ancillary service of separately stating information pertaining to individual calls on a customer's billing statement;
(6) "Directory assistance," an ancillary service of providing telephone number information, address information, or telephone number information and address information;
(7) "Vertical service," an ancillary service that is offered in connection with one or more telecommunications services, which offers advanced calling features that allow customers to identify callers and to manage multiple calls and call connections, including conference bridging services;
(8) "Voice mail service," an ancillary service that enables the customer to store, send, or receive recorded messages. The term does not include any vertical services that the customer may be required to have in order to utilize the voice mail service;
(9) "Conference bridging service," an ancillary service that links two or more participants of an audio or video conference call and may include the provision of a telephone number. The term does not include the telecommunications services used to reach the conference bridge.
Source: SL 2009, ch 47, § 2; SL 2010, ch 56, § 1.
10-45-1.19. Gross receipts excludes tax imposed by certain chapters and sections.
Notwithstanding any other provision of law, gross receipts as defined in this chapter do not include any tax imposed by this chapter and chapters 10-45D, 10-52, and 10-52A, and §§ 49-34A-45 and 49-34A-46 that is separately stated on the invoice, bill of sale, or similar document given to the purchaser.
Source: SL 2013, ch 56, § 1; SL 2015, ch 232, § 3.