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If a seller has not obtained an exemption certificate or all relevant data for exemption certificates for South Dakota sales and use tax, the seller may, within 120 days following a request for substantiation, either prove that the transaction was not subject to tax or attain a fully completed exemption certificate from the purchaser; effective July 1, 2007. The Department of Revenue need not consider any exemption certificate presented after the 120 days. (H.B. 1055, Laws 2007)

(04/16/2007)

A South Dakota Department of Revenue and Regulation publication discusses the sales and use tax liability of an architect’s purchases of blueprints for resale to the owner of the project. There are no South Dakota provisions allowing a service provider to purchase a tangible personal property for resale; therefore, architects providing a service may not purchase blueprints for resale. However, if the architect sells blueprints and does not provide client services, such as design or modifications, then the copies can be purchased for resale as tangible personal property. (Taxation, Vol. 7 No. 1, South Dakota Department of Revenue and Regulation, January 2007)

(04/13/2007)

On February 11, 2005 the South Dakota Senate introduced Concurrent Resolution No. 5, which would urge Congress to sponsor and support the Streamlined Sales and Use Tax Agreement. The Senate’s argument for the Agreement is based upon revenue losses as a result of the physical presence requirement set in Bellas Hess and Quill Supreme Court decisions. Studies have shown that South Dakota lost considerable tax revenue in 2003 due to their inability to collect tax on remote sales, including sales over the internet. Revenue losses are expected to increase to $88.6 million by 2008. Although a voluntary streamlined sales and use tax system would likely boost tax revenue by $2 million to $3 million, the Senate does not believe that tax revenue losses from remote sellers will be fully recovered until South Dakota, as a member of the Agreement, can require remote sellers in complying states to collect and remit South Dakota taxes. (Concurrent Resolution No. 5, South Dakota Senate, introduced February 11, 2005)

(03/24/2005)

The South Dakota Governor has signed H.B. 1142, which provides for certain fabricators to apply for a sales and use tax refund. The bill, which becomes effective July 1, 2005, states that a contractor or subcontractor licensed pursuant to Chapter 10-46A or 10-46B may apply for a refund of South Dakota sales and use tax paid by such contractor if the following conditions are met: (1) the sales and use tax subject to the refund request was paid by the contractor or subcontractor requesting the refund for the use of tangible personal property; (2) the tangible personal property upon which the sales and use tax was paid was purchased by the contractor or subcontractor requesting the refund; (3) the tangible personal property upon which the sales and use tax was paid was fabricated by the contractor or subcontractor in South Dakota; (4) the fabricated tangible personal property was used outside of South Dakota by the contractor or subcontractor in the performance of a contract; (5) the fabricated tangible personal property is not returned to South Dakota; and (6) the fabricated tangible personal property is exempt from sales or use tax in the state where the contract is performed. The bill further states that the refund claims shall be submitted on a form prescribed the Secretary of the Department of Revenue. (H.B. 1142, South Dakota Department of Revenue and Regulation, effective July 1, 2005)

(03/10/2005)

Citing the significant increase in new home building in a recent edition of South Dakota Taxation News, the South Dakota Department of Revenue and Regulation discussed the addition of a bid calculator for contractors. The Department stated that since they have limited time to work with contractors, they found it necessary to create the bid calculator. The calculator is a form that can be viewed with Adobe Acrobat Reader; this form will provide the proper tax amount based on the figures entered into the form by the user. The publication further discussed the responsibilities of specialty builders. Specialty builders in the State of South Dakota are required to have a contractor’s excise tax license, are responsible for paying sales or use tax on all construction materials, and are responsible for remitting the 2% contractor’s excise tax at the time of closing, if sold within four years of completion. The publication also discussed other sales and use tax issues including recent legislative updates by the state in regards to the SSTP. (South Dakota Taxation News, South Dakota Department of Revenue and Regulation, January 2005)

(03/05/2005)

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