SDLRC - Codified Law 10-46-2 - Tax on tangible personal property purchased for use in state--Rate based on purchase price.

10-46-2. Tax on tangible personal property purchased for use in state--Rate based on purchase price.

An excise tax is hereby imposed on the privilege of the use, storage, and consumption in this state of tangible personal property purchased for use in this state at the same rate of percent of the purchase price of said property as is imposed pursuant to chapter 10-45.

Source: SL 1939, ch 276, § 3; SL 1953, ch 471, § 1; SDC Supp 1960, § 57.4303 (1); SL 2001, ch 56, § 7.

10-46-2.1. Tax on use of services--Exemptions--Related corporation defined.

For the privilege of using services in South Dakota, except those types of services exempted by § 10-46-17.3, there is imposed on the person using the service an excise tax equal to four and two-tenths percent of the value of the services at the time they are rendered. However, this tax may not be imposed on any service rendered by a related corporation, as defined in subdivision 10-43-1(11), for use by a financial institution, as defined in subdivision 10-43-1(4); or on any service rendered by a financial institution, as defined in subdivision 10-43-1(4), for use by a related corporation as defined in subdivision 10-43-1(11). For the purposes of this section, the term, related corporation, includes a corporation, which together with the financial institution, is part of a controlled group of corporations, as defined in 26 U.S.C. § 1563 as in effect on January 1, 1989, except that the eighty percent ownership requirements set forth in 26 U.S.C. § 563(a)(2)(A) for a brother-sister controlled group are reduced to fifty-one percent. For the purpose of this chapter, services rendered by an employee for the use of the employer are not taxable.

Source: SL 1979, ch 84, § 6D; SL 1980, ch 325, § 21; SL 1983, ch 97, § 2; SL 1987, ch 98, § 10; SL 1988, ch 106, § 1; SL 1989, ch 110, § 2; SL 2016, ch 65, § 9, eff. June 1, 2016; SL 2023, ch 32, § 9.

10-46-2.1. Tax imposed on use of services--Exemptions--Related corporation defined.

For the privilege of using services in South Dakota, except those types of services exempted by § 10-46-17.3, there is imposed on the person using the service an excise tax equal to four and one-half percent of the value of the services at the time they are rendered. However, this tax may not be imposed on any service rendered by a related corporation as defined in subdivision 10-43-1(11) for use by a financial institution as defined in subdivision 10-43-1(4) or on any service rendered by a financial institution as defined in subdivision 10-43-1(4) for use by a related corporation as defined in subdivision 10-43-1(11). For the purposes of this section, the term related corporation includes a corporation which together with the financial institution is part of a controlled group of corporations as defined in 26 U.S.C. § 1563 as in effect on January 1, 1989, except that the eighty percent ownership requirements set forth in 26 U.S.C. § 563(a)(2)(A) for a brother-sister controlled group are reduced to fifty-one percent. For the purpose of this chapter, services rendered by an employee for the use of his employer are not taxable.

Source: SL 1979, ch 84, § 6D; SL 1980, ch 325, § 21; SL 1983, ch 97, § 2; SL 1987, ch 98, § 10; SL 1988, ch 106, § 1; SL 1989, ch 110, § 2; SL 2016, ch 65, § 9, eff. June 1, 2016; SL 2023, ch 32, §§ 9, 19.

10-46-2.2. Tax on use of rented property and products transferred electronically.

An excise tax is imposed upon the privilege of the use of rented tangible personal property and any product transferred electronically in this state at the rate of four and two-tenths percent of the rental payments upon the property.

Source: SL 1983, ch 86, § 7; SL 1987, ch 98, § 11; SL 1988, ch 106, § 1; SL 2008, ch 51, § 38; SL 2016, ch 65, § 10, eff. June 1, 2016; SL 2023, ch 32, § 10.

10-46-2.2. Tax on use of rented property and products transferred electronically.

An excise tax is imposed upon the privilege of the use of rented tangible personal property and any product transferred electronically in this state at the rate of four and one-half percent of the rental payments upon the property.

Source: SL 1983, ch 86, § 7; SL 1987, ch 98, § 11; SL 1988, ch 106, § 1; SL 2008, ch 51, § 38; SL 2016, ch 65, § 10, eff. June 1, 2016; SL 2023, ch 32, §§ 10, 19.

10-46-2.3. Exemption of use of property leased.

The use, storage, or consumption of tangible personal property and any product transferred electronically actually leased to persons in this state is exempted from the provisions of this chapter and the tax imposed by it.

Source: SL 1983, ch 86, § 5; SL 2008, ch 51, § 39.

10-46-2.4. Certain purchases considered for resale purposes.

Services purchased by an engineer, architect, or surveyor on behalf of a client in the performance of a contract for such client shall be considered purchases for resale purposes.

Source: SL 1988, ch 107, § 2.

10-46-2.5. Chemicals purchased for use by lawn and garden services considered purchases for resale.

Chemicals purchased for use by lawn and garden services (industry no. 0782) as enumerated in the Standard Industrial Classification Manual, 1987, as prepared by the Statistical Policy Division of the Office of Management and Budget, Office of the President, and used in such services shall be considered as purchases for resale.

Source: SL 1989, ch 114, § 2.

10-46-2.6. Materials purchased for floor laying service considered purchase for resale.

Carpet, floor covering, tacks, glue, and other materials purchased for use by floor laying and other floor work not elsewhere classified (industry no. 1752) as enumerated in the Standard Industrial Classification Manual of 1987, as prepared by the Statistical Policy Division of the Office of Management and Budget, Office of the President, and used for such work are purchases for resale.

Source: SL 1991, ch 108, § 7.

10-46-2.7. 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, § 2.

10-46-2.8. Tax on use of product transferred electronically.

An excise tax is hereby imposed on the use, storage, or consumption in this state of any product transferred electronically purchased for use in this state at the same rate of percent of the purchase price of any product transferred electronically as is imposed pursuant to chapter 10-45.

The tax is imposed if:

(1) The sale is to an end user;

(2) The sale is to a person who is not an end user, unless otherwise exempted by this chapter;

(3) The seller grants the right of permanent or less than permanent user of the products transferred electronically; or

(4) The sale is conditioned or not conditioned upon continued payment.

For the purposes of this section, the term, end user, does not include any person who received by contract any product transferred electronically for further commercial broadcast, rebroadcast, transmission, retransmission, licensing, relicensing, distribution, redistribution, or exhibition of the product, in whole or in part, to another person.

For the purposes of this section, the term, permanent use, means perpetual or for an indefinite or unspecified length of time. The sale of a digital code that may be utilized to obtain a product transferred electronically shall be taxed in the same manner as the product transferred electronically. A digital code is a code that permits a purchaser to obtain at a later date a product transferred electronically.

Source: SL 2008, ch 51, § 30.