CHAPTER 10-43
INCOME TAX ON BANKS AND FINANCIAL CORPORATIONS
10-43-1 Definition of terms.
10-43-2 Tax imposed on financial institutions.
10-43-2.1 10-43-2.1. Repealed by SL 2016, ch 62, § 3.
10-43-3 10-43-3. Repealed by SL 1977, ch 96, § 20.
10-43-4 Time of liability for tax--Rate of tax--Minimum.
10-43-5 Income tax in lieu of other taxes.
10-43-6 10-43-6 to 10-43-10. Repealed by SL 1977, ch 96, § 20.
10-43-10.1 Net income defined.
10-43-10.2 Additions to taxable income.
10-43-10.3 Subtractions from taxable income.
10-43-10.4 Carryback of net operating losses not deductible.
10-43-10.5 Carryforward of net operating losses deductible.
10-43-11 10-43-11. Repealed by SL 1978, ch 83, § 3.
10-43-12 10-43-12 to 10-43-22. Repealed by SL 1977, ch 96, § 20.
10-43-22.1 Tax limited to income from business within state--Formula for net income apportionment.
10-43-23 10-43-23. Repealed by SL 1977, ch 96, § 20.
10-43-23.1 Property factor.
10-43-23.2 Valuation of property owned or rented--Net annual rental rate.
10-43-23.3 Average value determination.
10-43-24 10-43-24. Repealed by SL 1977, ch 96, § 20.
10-43-24.1 Payroll factor.
10-43-24.2 Compensation paid in state.
10-43-24.3 10-43-24.3. Repealed by SL 2014, ch 61, § 4, eff. Jan. 1, 2015.
10-43-25 10-43-25. Repealed by SL 1977, ch 96, § 20.
10-43-25.1 Receipts factor.
10-43-25.2 Interest, fees, and penalties in nature of interest, discount, and net gain from loans included in numerator.
10-43-25.3 Fees, commissions, service charges, and other receipts included in numerator.
10-43-25.4 Rental property receipts included in numerator.
10-43-25.5 Interest, dividends, and net gains from securities transactions included in numerator.
10-43-25.6 Receipts from securities used to maintain reserves against deposits included in numerator.
10-43-25.7 Receipts from securities held or pledged for public or trust funds included in numerator.
10-43-25.8 Affiliated service income included in numerator.
10-43-25.9 Affiliated service income defined.
10-43-26 10-43-26 to 10-43-29. Repealed by SL 1977, ch 96, § 20.
10-43-29.1 Alternative apportionment methods.
10-43-30 Time for filing annual return and paying tax--Penalty and interest for delinquency.
10-43-30.1 Extension of time to file return--Conditions--Interest.
10-43-31 10-43-31, 10-43-32. Repealed by SL 2016, ch 62, §§ 12, 13.
10-43-33 10-43-33. Repealed by SL 1977, ch 96, § 20.
10-43-34 Final return on dissolution.
10-43-35 10-43-35. Repealed by SL 1977, ch 96, § 20.
10-43-36 Consolidated report of related corporations.
10-43-37 10-43-37. Repealed by SL 1978, ch 83, § 4.
10-43-38 10-43-38 to 10-43-42. Repealed by SL 1977, ch 96, § 20.
10-43-42.1 Administration of chapter by secretary of revenue--Promulgation of rules.
10-43-43 10-43-43. Repealed by SL 1977, ch 96, § 20.
10-43-43.1 Records kept by taxpayers--Inspection by secretary--Out-of-state records.
10-43-44 10-43-44, 10-43-45. Repealed by SL 1977, ch 96, § 20.
10-43-46 False or fraudulent return or information with intent to evade legal requirements as misdemeanor--Civil penalty.
10-43-47 10-43-47. Repealed by SL 1977, ch 96, § 20.
10-43-48 10-43-48. Repealed by SL 1978, ch 70, § 6.
10-43-49 10-43-49. Repealed by SL 1977, ch 96, § 20.
10-43-50 10-43-50. Repealed by SL 2016, ch 63, § 4.
10-43-50.1 Supplementary return required for taxable income increase due to federal adjustment--Payment of additional tax and interest.
10-43-50.2 Supplementary return for taxable income decrease due to federal adjustment--Refund for overpayment.
10-43-50.3 Failure to file supplementary return--Secretary's determination of additional tax--Interest and penalties.
10-43-51 10-43-51, 10-43-51.1. Repealed by SL 2016, ch 63, §§ 5, 6.
10-43-52 10-43-52, 10-43-53. Superseded.
10-43-54 10-43-54. Repealed by SL 2019, ch 64, § 1.
10-43-55 10-43-55. Repealed by SL 2016, ch 63, § 7.
10-43-56 10-43-56 to 10-43-59. Repealed by SL 1977, ch 96, § 20.
10-43-60 10-43-60. Repealed by SL 2016, ch 63, § 8.
10-43-61 10-43-61. Repealed by SL 1977, ch 96, § 20.
10-43-62 10-43-62 to 10-43-67. Repealed by SL 2016, ch 62, §§ 17 to 22.
10-43-68 10-43-68. Repealed by SL 1977, ch 96, § 20.
10-43-69 10-43-69 to 10-43-72. Repealed by SL 2016, ch 62, §§ 23 to 26.
10-43-73 Tax payment as condition precedent to doing business--Injunction against continuation in business by delinquent taxpayer.
10-43-74 10-43-74. Repealed by SL 1982, ch 86, § 32.
10-43-75 10-43-75. Repealed by SL 1977, ch 96, § 20.
10-43-75.1 10-43-75.1. Repealed by SL 2016, ch 62, § 27.
10-43-76 Percentage of proceeds retained by state--Payment of remainder to counties--Branch office remittances kept separate.
10-43-77 Apportionment of funds among taxing subdivisions.
10-43-78 10-43-78. Repealed by SL 2016, ch 62, § 29.
10-43-79 10-43-79 to 10-43-81. Repealed by SL 1997, ch 66, §§ 1 to 3.
10-43-82 10-43-82. Repealed by SL 2016, ch 62, § 30.
10-43-83 10-43-83 to 10-43-87. Repealed by SL 1997, ch 66, §§ 5 to 10.
10-43-88 Financial institution authorized to engage in trust business.
10-43-89 Tax on financial institutions engaging in trust business.
10-43-90 Determining minimum tax imposed upon financial institutions engaged in the trust business.
10-43-91 Tax on trustee of extended term trust.
10-43-92 Extended term trust defined.
10-43-93 10-43-93. Repealed by SL 2009, ch 39, § 13.
10-43-94 Entities exempt from payment of tax.
10-43-1. Definition of terms.
Terms used in this chapter mean:
(1) \"Corporation,\" joint stock companies, limited partnerships, limited liability companies, and associations organized for pecuniary profit;
(a) \"Domestic corporation,\" any corporation organized under the laws of this state;
(b) \"Foreign corporation,\" any corporation other than a domestic corporation;
(1A) \"Credit card bank,\" any financial institution that is subject to the tax imposed by this chapter that:
(a) Derives the majority of its income apportioned to this state from the use of credit cards, including income derived from fees, transactional costs, interest, and penalties, and also has total assets over ten billion dollars; or
(b) Was subject to the tax imposed by this chapter before July 1, 2013, and ninety-five percent of its tax receipts were historically distributed to the state general fund pursuant to § 10-43-76 before July 1, 2013.
(2) \"Depository,\" any bank with deposits insured under the Federal Deposit Insurance Act, any institution with accounts insured by the federal savings and loan insurance corporation, or any thrift or home financing institution which is a member of a federal home loan bank; any other bank or thrift institution, incorporated or organized under the laws of any state, which is engaged in the business of receiving deposits; or any company, organized or created under the laws of a foreign country, which maintains or owns a branch or subsidiary in the United States receiving deposits;
(3) \"Dividend,\" any distribution made by a corporation out of its earnings or profits to its shareholders or members, whether in cash or in other property of the corporation;
(4) \"Financial institution,\" any banking institution, production credit association, or savings and loan association organized under the laws of the United States and located or doing business in this state; any bank, savings and loan association, mutual saving bank, or trust company, organized under the laws of this state or of any other state, district, territory, or country, doing business within this state; any person licensed in this state pursuant to chapter 54-4, the installment repayment small loan and consumer finance law; and any person in the business of buying loans, notes, or other evidences of debt except those persons registered as broker-dealers pursuant to chapter 47-31B; and persons in the business of making installment repayment and open-end loans which may be unsecured or secured by real or personal property, which loans are in an aggregate amount exceeding five hundred dollars, which are repaid in two or more installment payments or one lump sum payment extending over a time exceeding thirty days from the day the loan was made except where the loan is made by the person selling the property, incidental to the sale of the property and where the seller is primarily in the business of selling such real or personal property or except where the loan is made to a related corporation and the primary business of these related corporations is the production and sale of tangible personal property or where the loan is made in the form of an advance to secure the production of equipment to be obtained by the lender or to finance a joint venture between the lender and others which has been formed to produce and sell tangible personal property;
(5) \"Fiscal year,\" an accounting period of twelve months, ending on the last day of any month other than December;
(6) \"Foreign country,\" any jurisdiction other than one embraced within the United States. \"United States,\" when used in a geographical sense, includes the states, the District of Columbia, and the possessions of the United States;
(7) \"Income year,\" the calendar year or the fiscal year upon which the net income is computed;
(8) \"Individual,\" a natural person;
(9) \"Paid,\" for the purposes of the deductions means paid or accrued or paid or incurred, and the terms paid or incurred and paid or accrued are construed according to the accounting method used for computing net income; received, for the purpose of the computation of net income means received or accrued, and the term received or accrued is construed according to the accounting method used for computing net income;
(10) \"Person,\" includes individuals, firms, associations, limited liability companies, corporations, estates, fiduciaries, and all entities from which income tax may be due. In no event shall a pass-through entity owned in whole or in part, directly or indirectly, by a financial institution subject to tax under this chapter, and formed primarily to facilitate the securitization of assets, be treated as a person for the purpose of subdivision 10-43-1(4);
(11) \"Related corporation,\" a corporation associated with another as its parent or subsidiary, or in a brother-sister relation;
(12) \"Taxable income,\" all net income;
(13) \"Taxpayer,\" includes any person, corporation, or fiduciary who is subject to a tax imposed by this chapter;
(14) \"Tax year,\" the calendar year, or the fiscal year ending during a calendar year, used for computing net income.
Source: SDC 1939, § 57.2601; SL 1939, ch 263, §§ 1, 2; SDC Supp 1960, §§ 57.30A01, 57.30A02; SL 1977, ch 96, §§ 1, 20, 21; SL 1982, ch 106; SL 1984, ch 83; SL 1989, ch 30, § 31; SL 1994, ch 91; SL 2000, ch 58, § 2; SL 2003, ch 59, § 1; SL 2004, ch 278, § 58; SL 2013, ch 53, § 1; SL 2016, ch 62, § 1.
10-43-2. Tax imposed on financial institutions.
An annual tax is hereby imposed on each financial institution doing business in this state or licensed to do business in this state during any part of its tax year.
Source: SL 1939, ch 263, §§ 3, 4; SDC Supp 1960, §§ 57.30A03, 57.30A04; SDCL § 10-43-3; SL 1977, ch 96, § 2; SL 2016, ch 62, § 2.
10-43-4. Time of liability for tax--Rate of tax--Minimum.
The liability for the tax imposed by this chapter shall arise upon the first day of each tax year and shall be based upon the net income assignable to this state at the rate of six percent on net income of four hundred million dollars or less; at the rate of five percent on net income exceeding four hundred million dollars but equal to or less than four hundred twenty-five million dollars; at the rate of four percent on the net income exceeding four hundred twenty-five million dollars but equal to or less than four hundred fifty million dollars; at the rate of three percent on the net income exceeding four hundred fifty million dollars but equal to or less than four hundred seventy-five million dollars; at the rate of two percent on the net income exceeding four hundred seventy-five million dollars but equal to or less than five hundred million dollars; at the rate of one percent on the net income exceeding five hundred million dollars but equal to or less than six hundred million dollars; at the rate of one-half of one percent on the net income exceeding six hundred million dollars but equal to or less than one billion two hundred million dollars; and at the rate of one-quarter of one percent on the net income exceeding one billion two hundred million dollars. The tax payable under this section may be no less than two hundred dollars.
Source: SL 1939, ch 263, §§ 5, 8; SL 1941, ch 356, § 1; SL 1943, ch 300; SL 1957, ch 467; SDC Supp 1960, §§ 57.30A05, 57.30A08; SL 1969, ch 266, § 1; SL 1976, ch 96, § 1; SL 1977, ch 97; SL 1979, ch 82, § 1; SL 1991, ch 97; SL 2000, ch 58, § 1; SL 2016, ch 62, § 4.
10-43-5. Income tax in lieu of other taxes.
The tax referred to in this chapter is in lieu of all other taxes, state, county, and local, except taxes upon the institutions' real property, taxes upon the institutions' leased sites, taxes upon tangible personal property and products transferred electronically not normally used in extension of credit or acceptance of deposits and the retail sales tax or the use tax on tangible personal property and any product transferred electronically. However, tangible personal property and any product transferred electronically acquired by the financial institution through a foreclosure proceeding are exempt from such other taxes.
Source: SL 1939, ch 263, §§ 8, 10; SL 1943, ch 300; SDC Supp 1960, §§ 57.30A08, 57.30A10; SL 1977, ch 96, § 3; SL 1983, ch 356, § 6; SL 2008, ch 37, § 102; SL 2008, ch 51, § 68; SL 2016, ch 62, § 5.
10-43-10.1. Net income defined.
Net income, in the case of a financial institution, is taxable income as defined in the United States Internal Revenue Code, as defined by § 10-1-47, and reportable for federal income tax purposes for the taxable year, but subject to the adjustments as provided in §§ 10-43-10.2 and 10-43-10.3. If a financial institution has elected to file its federal tax return pursuant to 26 USC § 1362(a) of the United States Internal Revenue Code, as defined by § 10-1-47, net income shall be computed in the same manner and in the same amount as if that institution had continued to file its federal tax return without making the election and the financial institution shall continue to be treated as a separate corporation for the purposes of this chapter. If a financial institution is organized as a limited liability company, the limited liability company shall be treated as a separate corporation for the purpose of this chapter.
Source: SL 1977, ch 96, § 4; SL 1978, ch 83, § 5; SL 1979, ch 82, § 3; SL 1981, ch 98; SL 1982, ch 95, § 3; SL 1983, ch 82, § 1; SL 1984, ch 70, § 1; SL 1985, ch 83, § 1; SL 1986, ch 98, § 1; SL 1987, ch 95; SL 1988, ch 103, § 1; SL 1989, ch 101, § 1; SL 1990, ch 83, § 1; SL 1991, ch 98, § 1; SL 1992, ch 68, § 1; SL 1993, ch 95, § 1; SL 1994, ch 92, § 1; SL 1995, ch 65, § 1; SL 1996, ch 79, § 1; SL 1997, ch 64, § 1; SL 1997, ch 65, § 1; SL 1998, ch 68, § 1; SL 1999, ch 56, § 1; SL 2000, ch 59, § 1; SL 2001, ch 53, § 1; SL 2002, ch 59, § 1; SL 2003, ch 60, § 1; SL 2004, ch 90, § 1; SL 2004, ch 289, § 3; SL 2005, ch 67, § 1; SL 2006, ch 45, § 1; SL 2007, ch 54, § 1; SL 2008, ch 46, § 3; SL 2009, ch 39, § 9; SL 2010, ch 45, § 9; SL 2011, ch 48, § 9; SL 2012, ch 59, § 9; SL 2013, ch 42, § 9; SL 2014, ch 54, § 9; SL 2015, ch 62, § 9; SL 2016, ch 54, § 10.
10-43-10.2. Additions to taxable income.
Added to taxable income are:
(1) Interest or dividend income derived from obligations or securities of states or political subdivisions, or authorities thereof, not included in taxable income as determined under the Internal Revenue Code;
(2) All income taxes paid or accrued, as applicable, during the tax year under the provisions of this chapter or under the provisions of any income tax, or franchise or privilege taxes measured by income levied by any other state or political subdivision to the extent that the taxes were deducted to determine federal taxable income;
(3) Any amount received as a refund of federal income taxes during the tax year if that amount was previously deducted in determining net income;
(4) Dividends received from other corporations to the extent that the dividends have been deducted from net income as determined under the Internal Revenue Code; and
(5) Any capital loss from:
(a) Liquidating sales within the twelve-month period beginning on the date on which a financial institution adopts a plan of complete liquidation, if all the assets of the financial institution are distributed in complete liquidation, less assets retained to meet claims within the twelve-month period; or
(b) The distribution of property in complete liquidation of the financial institution that is subject to federal corporate income taxes pursuant to § 336 of the Internal Revenue Code.
Source: SL 1977, ch 96, § 4(1); SL 1978, ch 83, § 1; SL 1987, ch 96, §§ 1, 5; SL 2014, ch 60, § 1, eff. Jan. 1, 2015; SL 2026, ch 51, § 2.
10-43-10.3. Subtractions from taxable income.
Subtracted from taxable income are:
(1) Dividends received from financial institutions subject to taxation under this chapter, to the extent the dividends were included in taxable income as determined under the Internal Revenue Code;
(2) Taxes imposed upon the financial institution within the tax year, under the Internal Revenue Code, excluding any taxes imposed under 26 USC § 1374 and 26 USC § 1375;
(3) Any interest expense described in §§ 291(e)(1)(B) and 265(b) of the Internal Revenue Code, which interest expense is deductible;
(4) Any capital gain from:
(a) Liquidating sales within the twelve-month period beginning on the date on which a financial institution adopts a plan of complete liquidation, if all of the assets of the financial institution are distributed in complete liquidation, less assets retained to meet claims within the twelve-month period; or
(b) The distribution of property in complete liquidation of the financial institution that is subject to federal corporate income taxes pursuant to § 336 of the Internal Revenue Code;
(5) For those financial institutions making an election pursuant to 26 USC § 1362(a) of the United States Internal Revenue Code, as defined by § 10-1-47, imputed federal income taxes in an amount equal to the taxes that would have been paid on net income as defined in § 10-43-10.1 had the financial institution continued to file its federal tax return without making an election to file pursuant to 26 USC § 1362(a); and
(6) For those financial institutions organized as limited liability companies, imputed federal income taxes in an amount equal to the taxes that would have been paid on net income as defined in § 10-43-10.1 had the financial institution elected to file as a subchapter C corporation under the Internal Revenue Code.
Source: SL 1977, ch 96, § 4 (2); SL 1978, ch 83, § 2; SL 1985, ch 84; SL 1987, ch 96, §§ 2-4; SL 1988, ch 104; SL 1997, ch 64, § 2; SL 2004, ch 289, § 4; SL 2014, ch 60, § 2, eff. Jan. 1, 2015; SL 2015, ch 62, § 11; SL 2016, ch 54, § 11; SL 2016, ch 62, § 6; SL 2026, ch 51, § 3.
10-43-10.4. Carryback of net operating losses not deductible.
No carryback of net operating losses may be deducted from net income for state tax purposes.
Source: SL 1982, ch 108; SL 2014, ch 60, § 3, eff. Jan. 1, 2015; SL 2016, ch 62, § 7.
10-43-10.5. Carryforward of net operating losses deductible.
A deduction may be made for a carryforward of a net operating loss. The deduction is limited to the seven tax years immediately following the tax year of the loss. Net income may not be less than zero prior to making the adjustments provided for in §§ 10-43-10.2 and 10-43-10.3 because of a deduction taken for losses not incurred during the tax year for which the return is being filed.
The provisions of this section only apply to net operating losses incurred on or after January 1, 2015.
Source: SL 2014, ch 60, § 4, eff. Jan. 1, 2015; SL 2016, ch 62, § 8.
10-43-22.1. Tax limited to income from business within state--Formula for net income apportionment.
Financial institutions engaged in business within and without the state shall be taxed only on such business as is properly apportioned to this state. All net income shall be apportioned to this state by multiplying the net income by a fraction, the numerator of which is the property factor, plus the payroll factor plus the receipts factor, the denominator of which is three.
Source: SL 1935, ch 205, § 15-a; SDC 1939, § 57.2707; SDCL, § 10-43-22; SL 1977, ch 96, § 5.
10-43-23.1. Property factor.
The property factor used in § 10-43-22.1 is a fraction, the numerator of which is the average value of the financial institution's real and tangible property owned or rented and used in this state during the tax period and the denominator of which is the average value of all the financial institution's real and tangible personal property owned or rented and used everywhere during the tax period.
Source: SL 1977, ch 96, § 6; SL 2014, ch 61, § 1, eff. Jan. 1, 2015.
10-43-23.2. Valuation of property owned or rented--Net annual rental rate.
Property owned by the financial institution is valued at its original cost. Property rented by the financial institution is valued at eight times the net annual rental rate. Net annual rental rate is the annual rental rate paid by the taxpayer less any annual rental received by the financial institution from subrentals.
Source: SL 1977, ch 96, § 7.
10-43-23.3. Average value determination.
The average value of property shall be determined by averaging the values at the beginning and ending of the tax period if reasonably required to reflect properly the average value of the financial institution's property.
Source: SL 1977, ch 96, § 8.
10-43-24.1. Payroll factor.
The payroll factor used in § 10-43-22.1 is a fraction, the numerator of which is the total amount paid in this state during the tax period by the financial institution for compensation, and the denominator of which is the total compensation paid everywhere during the tax period. Compensation does not include any payment to any independent contractor or any other person not classified as an employee.
Source: SL 1977, ch 96, § 9; SL 2014, ch 61, § 2, eff. Jan. 1, 2015; SL 2016, ch 62, § 9.
10-43-24.2. Compensation paid in state.
Compensation is paid in this state if:
(1) The individual's service is performed entirely within this state;
(2) The individual's service is performed both within and without the state, but the service performed without the state is incidental to the individual's service within the state; or
(3) Some of the individual's service is performed in the state and:
(a) The base of operations, or if there is no base of operations, the place from which the individual's service is directed or controlled, is in this state; or
(b) The base of operations or place from which the individual's service is directed or controlled is not in any state in which some part of the individual's service is performed, but the individual's residence is in this state.
Source: SL 1977, ch 96, § 10 (1), (2); SL 2014, ch 61, § 3, eff. Jan. 1, 2015.
10-43-25.1. Receipts factor.
The receipts factor used in § 10-43-22.1 is a fraction, the numerator of which is the total receipts of the financial institution in the state during the tax period, and the denominator of which is the total receipts of the financial institution everywhere during the tax period.
Source: SL 1977, ch 96, § 11; SL 2014, ch 61, § 5, eff. Jan. 1, 2015.
10-43-25.2. Interest, fees, and penalties in nature of interest, discount, and net gain from loans included in numerator.
Interest, fees and penalties in the nature of interest, discount, and net gain from loans, including federal funds sold and acceptances, and other installment obligations shall be included in the numerator specified in § 10-43-25.1 as follows:
(1) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans secured by real property if the property is located within this state. If the property is located both within this state and one or more other states, the receipts described in this subdivision are included in the numerator of the receipts factor if more than fifty percent of the fair market value of the real property is located within this state. If more than fifty percent of the fair market value of the real property is not located within any one state, the receipts described in this subdivision shall be included in the numerator of the receipts factor if the borrower's billing address is located in this state;
(2) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans not secured by real property if the borrower's billing address is located in this state;
(3) The numerator of the receipts factor includes net gains (but not less than zero) from the sale of loans secured by real property multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subdivision (1) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property;
(4) The numerator of the receipts factor includes net gains (but not less than zero) from the sale of loans not secured by real property multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subdivision (2) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property;
(5) The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to card holders, such as annual fees, if the billing address of the card holder is in this state; and
(6) The numerator of the receipts factor includes net gains (but not less than zero) from the sale of credit card receivables multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subdivision (5) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders.
Source: SL 1977, ch 96, § 12; SL 2014, ch 61, § 6, eff. Jan. 1, 2015.
10-43-25.3. Fees, commissions, service charges, and other receipts included in numerator.
Fees, other than those described in § 10-43-25.2, commissions, service charges, and other receipts from the rendering of financial or fiduciary services shall be included in the numerator specified in § 10-43-25.1 if the service is principally performed in South Dakota unless the fees, commissions, service charges, and other receipts are affiliated service income as provided in § 10-43-25.8.
Source: SL 1977, ch 96, § 13; SL 1996, ch 80, § 1; SL 2014, ch 61, § 7, eff. Jan. 1, 2015.
10-43-25.4. Rental property receipts included in numerator.
Receipts from the rental of real or tangible personal property shall be included in the numerator specified in § 10-43-25.1 if the property is principally located in South Dakota.
Source: SL 1977, ch 96, § 14; SL 2014, ch 61, § 8, eff. Jan. 1, 2015.
10-43-25.5. Interest, dividends, and net gains from securities transactions included in numerator.
Interest, dividends, and net gains from transactions in securities, including stocks, bonds, and all other money markets instruments, shall be included in the numerator specified in § 10-43-25.1 if the financial institution's principal place of business is in South Dakota.
Source: SL 1977, ch 96, § 15; SL 2014, ch 61, § 9, eff. Jan. 1, 2015.
10-43-25.6. Receipts from securities used to maintain reserves against deposits included in numerator.
Notwithstanding the provisions of § 10-43-25.5, receipts from securities used to maintain reserves against deposits to meet federal and state reserve requirements shall be included in the numerator specified in § 10-43-25.1 based on the ratio that the deposits in South Dakota bear to total deposits everywhere during the tax period.
Source: SL 1977, ch 96, § 15 (1); SL 2014, ch 61, § 10, eff. Jan. 1, 2015.
10-43-25.7. Receipts from securities held or pledged for public or trust funds included in numerator.
Receipts from securities owned by a financial institution but held or pledged to secure public or trust funds shall be included in the numerator specified in § 10-43-25.1 if the financial institution's office where the deposits are maintained is in South Dakota.
Source: SL 1977, ch 96, §§ 15 (2), 20; SL 2014, ch 61, § 11, eff. Jan. 1, 2015.
10-43-25.8. Affiliated service income included in numerator.
Affiliated service income shall be included in the numerator specified in § 10-43-25.1 only if the income relates to:
(1) Loans secured primarily by real property or tangible personal property located in this state;
(2) Loans made to customers located in this state, which are not secured by real property or tangible personal property; or
(3) Credit card receivables from customers in this state.
Source: SL 1996, ch 80, § 2; SL 2014, ch 61, § 12, eff. Jan. 1, 2015.
10-43-25.9. Affiliated service income defined.
For the purposes of §§ 10-43-25.3 and 10-43-25.8, affiliated service income means fees, commissions, service charges, and other receipts from the production or servicing of loans or credit card receivables by a nondepository financial institution for another nondepository financial institution, if each nondepository financial institution is in the same affiliated group for purposes of filing a consolidated federal corporate income tax return.
Source: SL 1996, ch 80, § 3; SL 2014, ch 61, § 13, eff. Jan. 1, 2015.
10-43-29.1. Alternative apportionment methods.
If the apportionment methods included in §§ 10-43-22.1 to 10-43-25.9, inclusive, do not fairly represent the financial institution's net income in this state, the financial institution may petition for, or the secretary may require with respect to all or any part of the taxpayer's business activity:
(1) Separate accounting;
(2) The exclusion of any one or more of the factors;
(3) The inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in this state; or
(4) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's taxable income.
The secretary shall promulgate rules pursuant to chapter 1-26 within six months of any decision to use any of the alternative apportionment methods provided under this section.
Source: SL 1935, ch 205, § 15-a; SDC 1939, § 57.2707; SDCL § 10-43-29; SL 1977, ch 96, § 16; SL 1987, ch 82, § 19; SL 2013, ch 54, § 1; SL 2013, ch 55, § 1.
10-43-30. Time for filing annual return and paying tax--Penalty and interest for delinquency.
Each taxpayer shall file a return for the tax year, and pay any tax imposed by this chapter, within fifteen days after the taxpayer's federal income tax return is due.
Any return not filed by the due date or tax not paid by the due date is delinquent and bears penalty and interest as provided in § 10-59-6.
Source: SDC 1939, § 57.2701; SL 1977, ch 96, § 17; SL 1983, ch 80, § 1; SL 1985, ch 85; SL 1988, ch 105; SL 1993, ch 96, § 11; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2008, ch 50, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2016, ch 62, § 10.
10-43-30.1. Extension of time to file return--Conditions--Interest.
Any taxpayer shall receive an extension of time to file the return required by this chapter to a day not later than six months from the day the return was originally due, if the taxpayer:
(1) Files for an extension of time to file the taxpayer's federal income tax return;
(2) Files a copy of the federal income tax return extension request with the Department of Revenue on or before the day the return was originally due; and
(3) Makes a reasonable estimate of the amount of tax due and pays that amount with or prior to the request for extension of time to file.
If the time for filing the return is extended at the request of the taxpayer, and the amount of tax due exceeds the reasonable estimate paid pursuant to subdivision (3), interest, but not penalty, shall be added to the difference at the same rate as provided for in § 10-59-6 from the time the return was originally due until the additional taxes due are paid.
Source: SL 1987, ch 97; SL 2008, ch 50, § 2; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2016, ch 62, § 11.
10-43-34. Final return on dissolution.
Before a corporation may be dissolved and its assets distributed, the corporation shall make a return for any settlement of the tax for any income earned in the income year up to its final date of dissolution.
Source: SL 1935, ch 205, § 15; SDC 1939, § 57.2713; SL 2008, ch 37, § 103; SL 2016, ch 62, § 14.
10-43-36. Consolidated report of related corporations.
Any related corporation required to report under this chapter and owned or controlled either directly or indirectly by another corporation may petition the secretary of revenue, or may be required by the secretary of revenue, to make a consolidated report with related corporations that are required to report under this chapter showing the combined net income, such assets of the corporation as are required for the purpose of this chapter, and such other information as the secretary of revenue may require by rule promulgated pursuant to chapter 1-26.
Source: SDC 1939, § 57.2714; SL 1977, ch 96, § 18; SL 1987, ch 82, § 20; SL 2000, ch 58, § 3; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2013, ch 54, § 2.
10-43-42.1. Administration of chapter by secretary of revenue--Promulgation of rules.
The provisions of this chapter shall be administered by the secretary of revenue and the secretary may promulgate rules, pursuant to chapter 1-26, concerning:
(1) The procedure for filing tax returns and payment of the tax;
(2) The type of accounting to be used;
(3) The definition and deductibility of net federal income taxes;
(4) The application of the tax and exemptions; and
(5) The records to be retained by the taxpayer.
Source: SL 1977, ch 96, § 19; SL 1987, ch 82, § 21; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2016, ch 62, § 15.
10-43-43.1. Records kept by taxpayers--Inspection by secretary--Out-of-state records.
Each person subject to tax under this chapter shall make and keep for a period of six years after federal taxable income has been finally determined by the United States any records as required by the secretary of revenue or otherwise necessary for the administration of this chapter. The records shall, at all times during business hours of the day, be subject to inspection by the secretary to determine the amount of tax due.
If in the normal conduct of the business, the required records are maintained and kept at an office outside the State of South Dakota, it shall be a sufficient compliance with this section if the records are made available for audit and examination by the Department of Revenue at the office outside of South Dakota.
Source: SL 1976, ch 96, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2016, ch 62, § 16.
10-43-46. False or fraudulent return or information with intent to evade legal requirements as misdemeanor--Civil penalty.
Any person, corporation, or any officer or employee of a corporation, or member or employee of any partnership, who, with intent to evade any of the requirements of this chapter or any lawful requirements of the secretary of revenue pursuant to this chapter, makes a false or fraudulent return or statement or supplies false or fraudulent information is guilty of a Class 1 misdemeanor. In addition, the person, corporation, officer, employee, or member is liable for a civil penalty of not more than five thousand dollars, to be recovered by the attorney general, in the name of the state. The civil penalty is in addition to all other penalties in this chapter.
Source: SDC 1939, § 57.9922; SL 1982, ch 86, § 31; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2008, ch 37, § 104; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-43-50.1. Supplementary return required for taxable income increase due to federal adjustment--Payment of additional tax and interest.
A taxpayer who has filed a return with the department for a specific tax year and subsequently has a change or correction to the taxpayer's net income, as a result of audit or adjustment by the United States, that increases the taxpayer's taxable income in this state, shall report the change or correction in writing to the secretary. The report shall be in the form of a supplementary return and shall be filed within one hundred twenty days of the final adjustment by the United States. Any additional tax due and applicable interest shall be paid at the time of filing the supplementary return. The provisions of this section apply notwithstanding the limitation period for collection of taxes provided under § 10-59-16.
Source: SL 2016, ch 63, § 1.
10-43-50.2. Supplementary return for taxable income decrease due to federal adjustment--Refund for overpayment.
A taxpayer who has filed a return with the department for a specific tax year and subsequently has a change or correction to the taxpayer's net income, as a result of audit or adjustment by the United States, that decreases the taxpayer's taxable income in this state, may report the change or correction in writing to the secretary. The report shall be in the form of a supplementary return and shall be filed within one hundred twenty days of the final adjustment by the United States. Any refund for overpayment of tax, penalty, or interest shall be made pursuant to §§ 10-59-22, 10-59-22.1, 10-59-23, and 10-59-24. The provisions of this section apply notwithstanding §§ 10-59-17 and 10-59-19.
No court has jurisdiction of a suit to recover the taxes, penalties, or interest unless the taxpayer seeking the recovery of the tax complies with the provisions of this section.
Source: SL 2016, ch 63, § 2.
10-43-50.3. Failure to file supplementary return--Secretary's determination of additional tax--Interest and penalties.
If a taxpayer fails to file a supplementary return as required by § 10-43-50.1, the secretary may determine the amount of additional tax due, if any, based on information available to the secretary. The secretary's determination of additional tax due, together with interest and penalty as provided in § 10-59-6, shall be made within six years after the time the supplementary return was due.
The secretary may also impose a penalty of five thousand dollars or ten percent of the additional tax due, whichever is greater, for failure to timely file a supplementary return and pay any additional tax and applicable interest as required by § 10-43-50.1. This penalty is in addition to all other penalties provided by law and shall be deposited in the state general fund.
Source: SL 2016, ch 63, § 3.
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10-43-73. Tax payment as condition precedent to doing business--Injunction against continuation in business by delinquent taxpayer.
The payment of the tax levied by this chapter is, in addition to all other licenses and taxes imposed by the laws of this state, a condition precedent to the engaging or continuing to engage in a business or occupation within this state. Default in the payment of taxes as provided in this chapter constitutes cause for injunction in any court of competent jurisdiction upon application of the secretary of revenue for an order and judgment restraining and enjoining any delinquent taxpayer from engaging or continuing to engage in an occupation or business within this state.
Source: SDC 1939, § 57.2904; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2008, ch 37, § 115; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011.
10-43-76. Percentage of proceeds retained by state--Payment of remainder to counties--Branch office remittances kept separate.
Upon the receipt of the funds referred to in this chapter, the secretary of revenue shall deposit ninety-five percent of the taxes paid by credit card banks and twenty-six and two-thirds percent of all other revenue to the general fund. The secretary of revenue shall remit the remainder, on or before February first of each year, to the county treasurer of the county wherein is situated the bank or financial institution remitting the tax. However, the remittance of tax from all branch banks, branch offices, or branches of other financial institutions subject to this tax shall be separated from the remittance of the parent bank or financial institution and shall be remitted to the county treasurer of the county in which the branch bank, branch office, or financial institution is located.
Source: SL 1957, ch 468; SDC Supp 1960, § 57.30A11; SL 1969, ch 266, § 2; SL 1979, ch 82, § 2; SL 1983, ch 80, § 2; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2005, ch 67, § 5; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2013, ch 53, § 2.
10-43-77. Apportionment of funds among taxing subdivisions.
The county treasurer upon receipt of the funds, remitted to the county pursuant to § 10-43-76, shall apportion and distribute the funds between the taxing subdivisions in the same proportion as the real property taxes levied in each taxing subdivision in the previous year as determined and certified by the secretary of revenue.
Source: SL 1957, ch 468; SDC Supp 1960, § 57.30A11; SL 1978, ch 72, § 5; SL 1991, ch 99; SL 2003, ch 272 (Ex. Ord. 03-1), § 82; SL 2005, ch 68, § 1; SL 2011, ch 1 (Ex. Ord. 11-1), § 161, eff. Apr. 12, 2011; SL 2016, ch 62, § 28.
10-43-88. Financial institution authorized to engage in trust business.
For the purpose of this section and §§ 10-43-89 and 10-43-90, financial institution means a financial institution defined in subdivision § 10-43-1(4) but is one which is authorized to engage in the trust business and has not been authorized to accept deposits by the director, comptroller of the currency, or the office of thrift supervision and is not a related corporation of a depository institution subject to the tax imposed by this chapter.
Source: SL 1995, ch 268, § 86; SL 1997, ch 272, § 17.
10-43-89. Tax on financial institutions engaging in trust business.
There is hereby imposed an annual minimum tax upon the financial institutions defined in § 10-43-88. This tax is the tax otherwise computed according to chapter 10-43 or the tax provided in § 10-43-90, whichever is greater.
Source: SL 1995, ch 268, § 87.
10-43-90. Determining minimum tax imposed upon financial institutions engaged in the trust business.
If a financial institution as described in § 10-43-88 has been authorized to engage in the trust business in South Dakota for fewer than twelve months, the annual minimum tax is five hundred dollars; for more than twelve months, but fewer than twenty-four months the annual minimum tax is two thousand dollars; for more than twenty-four months, but fewer than thirty-six months the annual minimum tax is five thousand dollars; for thirty-six months, but fewer than forty-eight months the annual minimum tax is ten thousand dollars; and for forty-eight months or more, the annual minimum tax is twenty-five thousand dollars.
Source: SL 1995, ch 268; § 88; SL 1997, ch 272, § 2.
10-43-91. Tax on trustee of extended term trust.
Any corporation, limited liability company, partnership, or other business entity which serves as a trustee or co-trustee for an extended term trust, which trust has a situs for state income tax purposes in the State of South Dakota, is subject to the South Dakota income tax on banks and financial corporations as set forth in chapter 10-43 and if the trustee has not been authorized to accept deposits by the South Dakota director of banking, the comptroller of the currency, the Office of Thrift Supervision, or the Federal Deposit Insurance Corporation, the trustee is deemed to be a financial institution as described in § 10-43-88 and is subject to the minimum tax set forth in § 10-43-90.
Source: SL 1997, ch 272, § 4.
10-43-92. Extended term trust defined.
As used in § 10-43-91, the term, extended term trust, means any trust which has no limitation on duration which would require the trust to cease and terminate on a date not later than twenty-one years beyond any life in being. Extended term trusts may not include any trust subject to the Employee Retirement Income Security Act of 1974, as amended and in effect on January 1, 2016.
Source: SL 1997, ch 272, § 3; SL 2016, ch 62, § 31.
10-43-94. Entities exempt from payment of tax.
The State of South Dakota, any political subdivision of the state, and any quasi-governmental organization created by an executive order of the State of South Dakota and any subsidiary of such organization; any nonprofit United States Treasury Community Development Financial Institution, Small Business Administration Certified Development Company, or Regional Revolving Loan Fund; or any commercial club, chamber of commerce, or industrial development corporation formed pursuant to § 9-12-11 or 9-27-37 is exempt from the payment of this tax.
Source: SL 2005, ch 257, § 7.