SDLRC - Codified Law 10-45-61 - Exemption certificate--Responsibilities of purchaser--Violation as misdemeanor--Retention of certificate--Rules and forms.

10-45-61. Exemption certificate--Responsibilities of purchaser--Violation as misdemeanor--Retention of certificate--Rules and forms.

A seller, who possesses an exemption certificate from a purchaser of tangible personal property, any product transferred electronically, or services that indicates the items or services being purchased are exempt, may rely on the exemption certificate and not charge sales tax to the provider of the exemption certificate until the provider of the exemption certificate gives notice that the items or services being purchased are no longer exempt by filing a new exemption certificate with the seller.

The exemption certificate shall be signed by the purchaser. The exemption certificate shall provide the purchaser's name, address, and valid state tax license number, if applicable. However, any person filing an electronic exemption certificate is not required to sign the exemption certificate.

The purchaser claiming the protection of an exemption certificate is responsible for assuring that the goods and services delivered thereafter are of a type covered by the exemption certificate. A seller of property, any product transferred electronically, or services which are generally described under the exemption certificate is not responsible for the collection of the tax unless otherwise directed by the purchaser.

If the purchaser later determines there is any tax due and owing, the purchaser shall remit the tax owed by the purchaser to the state. If the purchaser makes an exempt purchase and later determines that the goods or services purchased are not exempt, the purchaser shall report the transaction and pay the use tax on the next filing of the purchaser's return.

Any purchaser who knowingly files an exemption certificate with a retailer in order to purchase tangible personal property, any product transferred electronically, or services with the intent to evade payment of the tax, and fails to timely report the same with the department is guilty of a Class 1 misdemeanor. The secretary of revenue may assess a penalty of up to fifty percent of the tax owed, in addition to the tax owed. No interest may be charged on the penalty.

The seller shall retain the exemption certificate for a period of three years from the date it is filed by the purchaser and provide the exemption certificate to the department upon request.

The secretary may promulgate rules pursuant to chapter 1-26 to adopt forms for exemption certificates.

Source: SL 1993, ch 99; SL 2002, ch 64, § 26; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2008, ch 51, § 24; SL 2010, ch 58, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2021, ch 49, § 10.

10-45-61.1. Exemption certificate--Timing--Alternative Information.

Notwithstanding the provisions of §§ 10-45-61, 10-59-3, and 10-59-7, if the seller has not obtained an exemption certificate or all relevant data elements for an exemption certificate, the seller may, within one hundred twenty days subsequent to a request for substantiation by the Department of Revenue, do either of the following:

(1) Obtain a fully completed exemption certificate from the purchaser, taken in good faith which means that the seller obtained a certificate that claims an exemption that:

(a) Was statutorily available on the date of the transaction in the jurisdiction where the transaction is sourced;

(b) May be applicable to the item being purchased; and

(2) Obtain other information establishing that the transaction was not subject to the tax.

Any exemption certificate presented after one hundred twenty days need not be considered by the department.

Source: SL 2007, ch 59, § 1; SL 2020, ch 35, § 1.