10-46-5. Contractors and subcontractors taxed on property used in performance of contract--Fabrication costs excluded.

If a contractor or subcontractor, as defined in chapters 10-46A and 10-46B, uses tangible personal property or any product transferred electronically in the performance of a contract or to fulfill contract or subcontract obligations, whether the title to the property is in the name of the contractor, subcontractor, contractee, subcontractee, or any other person, or whether the titleholder of the property would be subject to pay the sales or use tax, the contractor or subcontractor shall pay a tax at the rate prescribed by § 10-45-2, measured by the purchase price or fair market value of the property, whichever is greater, unless the property has been previously subjected to a sales or use tax, in this state and the tax due thereon has been paid. However, if the contractor or subcontractor fabricates tangible personal property for use in the performance of a contract, fair market value excludes the value of the contractor's or subcontractor's fabrication costs.

Source: SDC Supp 1960, § 57.4303 (4) as added by SL 1966, ch 256; SL 1977, ch 99, § 2; SL 1982, ch 118, § 1; SL 1992, ch 91, § 1; SL 2008, ch 51, § 41.

10-46-5.1. Sectional homes not vehicles--Contractors taxed on materials used in construction--Sectional homes defined.

If a sectional home is permanently affixed to real property, it is not a vehicle subject to registration under chapter 32-3, and shall be classified as real property. A contractor who erects such a home shall hold a sales tax or use tax license and pay use tax based upon the fair market value of the raw materials used to construct and erect the home.

For the purpose of this section, the term, sectional home, means any home pre-built in part or in whole for the purpose of permanent placement on a foundation. Mobile homes as defined by subdivision 32-3-1(8) and manufactured homes as defined in subdivision 32-3-1(6) are not sectional homes.

Source: SDCL, § 10-46-5 as added by SL 1977, ch 99, § 2; SL 1987, ch 29, § 7; SL 2005, ch 71, § 2.

10-46-5.2. Materials incorporated in construction work--Restriction on application of rate increase.

No tax increase may be levied on materials incorporated in construction work pursuant to construction contracts bid or entered into on or before the effective date of the tax increase.

Source: SL 1984, ch 93, § 2; SL 2001, ch 56, § 8.

10-46-5.3. Value of molds and dies.

The value of molds and dies produced in connection with the fabrication or manufacture of other tangible personal property is limited to the cost of materials incorporated in the molds or dies to the extent the cost of such materials have not previously been subjected to sales or use tax.

Source: SL 1992, ch 91, § 2.

10-46-5.4. Exemption of materials becoming part of out-of-state signage or advertising.

Notwithstanding the provisions of § 10-46-5, the use in this state of tangible personal property and any product transferred electronically that becomes an integral and component part of a final product manufactured by a business classified in signs and advertising specialities, (industry no. 3993) 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, that is installed by the manufacturer outside of this state is exempt from the tax imposed by this chapter.

Source: SL 2003, ch 67, § 1; SL 2008, ch 51, § 42.