84
th Legislative Session _ 2009
196fa
On page 5, line 13, of the printed bill, delete "One-third" and insert "Twenty-five percent".
On page 5, after line 17, insert:
"
Section 14. That chapter
10-45
be amended by adding thereto a NEW SECTION to read as
follows:
There are exempted from the provisions of this chapter and the computation of the tax imposed
by it, the gross receipts from the sale of food.
Section 15. That
§
10-45-1
be amended to read as follows:
10-45-1.
Terms used in this chapter mean:
(1)
"Agricultural purposes," the producing, raising, growing, or harvesting of food or fiber
upon agricultural land, including dairy products, livestock, and crops. The services of
custom harvesters, chemical applicators, fertilizer spreaders, hay grinders, and cultivators
are considered agricultural purposes;
(1A) "Alcoholic beverages," any beverage that is suitable for human consumption and contains
one-half of one percent or more of alcohol by volume;
(2)
"Business," any activity engaged in by any person or caused to be engaged in by such
person with the object of gain, benefit, or advantage, either direct or indirect;
(3)
"Candy," any preparation of sugar, honey, or other natural or artificial sweeteners in
combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of
bars, drops, or pieces. The term, candy, does not include any preparation containing flour
and does not
. No candy may
require refrigeration;
(4)
"Delivery charges," charges by the retailer for preparation and delivery to a location
designated by the purchaser of tangible personal property, any product transferred
electronically, or services including transportation, shipping, postage, handling, crating,
and packing;
(4A) "Dietary supplement," any product, other than tobacco, intended to supplement the diet
that:
(a) Contains one or more of the following dietary ingredients:
(1) A vitamin;
(2) A mineral;
(3) A herb or other botanical;
(4) An amino acid;
(5) A dietary substance for use by humans to supplement the diet by increasing
the total dietary intake; or
(6) A concentrate, metabolite, constituent, extract, or combination of any
ingredient described in this subsection;
(b) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form,
or if not intended for ingestion in such a form, is not represented as conventional
food and is not represented for use as a sole item of a meal or of the diet; and
(c) Is required to be labeled as a dietary supplement, identifiable by the supplemental
facts box, found on the label and as required pursuant to 21 C.F.R.
§
101.36 as of
January 1, 2009;
(5)
"Food" and "food ingredient," any substance, whether in liquid, concentrated, solid,
frozen, dried, or dehydrated form, that is sold for ingestion or chewing by humans and is
consumed for its taste or nutritional value. The term, food, does not include
any
alcoholic
beverages
beverage
, tobacco,
soft drink, candy, dietary supplement,
or prepared food;
(5A) "Food sold through a vending machine," any food dispensed from a machine or other
mechanical device that accepts payment;
(6)
Repealed by SL 2007, ch 56, § 1.
(7)
"Person," any individual, firm, copartnership, joint adventure, association, limited liability
company, corporation, municipal corporation, estate, trust, business trust, receiver, the
State of South Dakota and its political subdivisions, or any group or combination acting
as a unit;
(8)
"Prepared food," any food sold in a heated state or heated by the seller; two or more food
ingredients mixed or combined by the seller for sale as a single item; or food sold with
eating utensils provided by the seller, including plates, knives, forks, spoons, glasses,
cups, napkins, or straws. A plate does not include a container or packaging used to
transport the food.
Prepared food does not include food that is only cut, repackaged, or pasteurized by the
seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods
requiring cooking by the consumer as recommended by the Food and Drug
Administration in chapter 3, part 401.11 of its Food Code as of January 1, 2003, so as to
prevent food borne illnesses;
(8A)
"Product transferred electronically," any product obtained by the purchaser by means other
than tangible storage media. A product transferred electronically does not include any
intangible such as a patent, stock, bond, goodwill, trademark, franchise, or copyright.
(9)
"Relief agency," the state, and county, municipality or district thereof, or any agency
engaged in actual relief work;
(10)
"Retail sale" or "sale at retail,' ' any sale, lease, or rental for any purpose other than for
resale, sublease, or subrent;
(11)
"Retailer," any person engaged in the business of selling tangible goods, wares, or
merchandise at retail, or the furnishing of gas, electricity, water, and communication
service, and tickets or admissions to places of amusement and athletic events as provided
in this chapter, and the sale at retail of products transferred electronically. The term also
includes any person subject to the tax imposed by §§ 10-45-4 and 10-45-5. The isolated
or occasional sale of tangible personal property or any product transferred electronically
at retail by a person who does not hold himself or herself out as engaging in the business
of selling such tangible personal property or products transferred electronically at retail
does not constitute such person a retailer;
(12)
"Sale," any transfer, exchange, or barter, conditional or otherwise, in any manner or by
any means whatsoever, for a consideration;
(13)
"Soft drinks," any nonalcoholic beverages that contain natural or artificial sweeteners. The
term, soft drinks, does not include any beverage that contains milk or milk products, soy,
rice of similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by
volume;
(14)
"Tangible personal property," personal property that can be seen, weighed, measured, felt,
or touched, or that is in any other manner perceptible to the senses. The term includes
electricity, water, gas, steam, and prewritten computer software
;
(15) "Tobacco," any cigarettes, cigars, chewing or pipe tobacco, or any other item that contains
tobacco
.
Section 16. That chapter
10-46
be amended by adding thereto a NEW SECTION to read as
follows:
There are exempted from the provisions of this chapter and the computation of the tax imposed
by it, the use or consumption of food.
Section 17. That
§
10-46-1
be amended to read as follows:
10-46-1.
Terms, as used in this chapter mean:
(1)
"Business," any activity engaged in by any person or caused to be engaged in by such
person with the object of gain, benefit or advantage either direct or indirect;
(1A) "Alcoholic beverages," any beverage that is suitable for human consumption and contains
one-half of one percent or more of alcohol by volume;
(2)
"Candy," any preparation of sugar, honey, or other natural or artificial sweeteners in
combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of
bars, drops, or pieces. The term, candy, does not include any preparation containing flour
and does not
. No candy may
require refrigeration;
(3)
"Delivery charges," charges by the retailer for preparation and delivery to a location
designated by the purchaser of tangible personal property, any product transferred
electronically, or services including transportation, shipping, postage, handling, crating,
and packing;
(3A) "Dietary supplement," any product, other than tobacco, intended to supplement the diet
that:
(a) Contains one or more of the following dietary ingredients:
(1) A vitamin;
(2) A mineral;
(3) A herb or other botanical;
(4) An amino acid;
(5) A dietary substance for use by humans to supplement the diet by increasing
the total dietary intake; or
(6) A concentrate, metabolite, constituent, extract, or combination of any
ingredient described in this subsection;
(b) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form,
or if not intended for ingestion in such a form, is not represented as conventional
food and is not represented for use as a sole item of a meal or of the diet; and
(c) Is required to be labeled as a dietary supplement, identifiable by the supplemental
facts box, found on the label and as required pursuant to 21 C.F.R.
§
101.36 as of
January 1, 2009;
(4)
"Fair market value," the price at which a willing seller and willing buyer will trade. Fair
market value shall be determined at the time of purchase. If a public corporation is
supplying tangible personal property or any product transferred electronically that will be
used in the performance of a contract, fair market value shall be determined pursuant to
§ 5-18-5.1. This definition also applies to chapter 10-45;
(5)
"Food" and "food ingredient," any substance, whether in liquid, concentrated, solid,
frozen, dried, or dehydrated form, that is sold for ingestion or chewing by humans and is
consumed for its taste or nutritional value. The term, food, does not include
any
alcoholic
beverages
beverage
, tobacco,
soft drink, candy, dietary supplement,
or prepared food;
(5A) "Food sold through a vending machine," any food dispensed from a machine or other
mechanical device that accepts payment;
(6)
"Included in the measure of tax," the tangible personal property, any product transferred
electronically, or the service was purchased from a retailer licensed under chapter 10-45
and that retailer has included the tax in the amount received from the sale;
(7)
"In this state" or "in the state," within the exterior limits of the State of South Dakota and
includes all territory within such limits owned by or ceded to the United States of
America;
(8)
"Prepared food," any food sold in a heated state or heated by the seller; two or more food
ingredients mixed or combined by the seller for sale as a single item; or food sold with
eating utensils provided by the seller, including plates, knives, forks, spoons, glasses,
cups, napkins, or straws. A plate does not include a container or packaging used to
transport the food.
Prepared food does not include food that is only cut, repackaged, or pasteurized by the
seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods
requiring cooking by the consumer as recommended by the Food and Drug
Administration in chapter 3, part 401.11 of its Food Code as of January 1, 2003, so as to
prevent food borne illnesses;
(8A)
"Product transferred electronically," any product obtained by the purchaser by means other
than tangible storage media. A product transferred electronically does not include any
intangible such as a patent, stock, bond, goodwill, trademark, franchise, or copyright.
(9)
"Purchase," any transfer, exchange, or barter, conditional or otherwise, in any manner or
by any means whatsoever, for a consideration. A transaction, whereby the possession of
property is transferred but the seller retains the title as security for the payment of the
price, is a purchase;
(10)
"Purchase price," shall have the same meaning as gross receipts defined in chapter 10-45;
(11)
"Retailer," any person performing services in this state or engaged in the business of
selling tangible personal property or products transferred electronically for use, storage
or other consumption within the meaning of this chapter. However, if in the opinion of
the secretary of revenue and regulation, it is necessary for the efficient administration of
this chapter to regard any salesmen, representatives, truckers, peddlers, or canvassers as
agents of the dealers, distributors, supervisors, employers, or persons under whom they
operate or from whom they obtain the tangible personal property or any product
transferred electronically sold by them irrespective of whether they are making sales on
their own behalf or on behalf of such dealers, distributors, supervisors, employers, or
persons, the secretary of revenue and regulation may so regard them and may regard the
dealers, distributors, supervisors, employers, or persons as retailers for purposes of this
chapter;
(12)
"Retailer maintaining a place of business in the state," any retailer having or maintaining
within this state, directly or by a subsidiary, an office, distribution house, sales house,
warehouse, or other place of business, or any agents operating within the state under the
authority of the retailer or its subsidiary, irrespective of whether such place of business
or agent is located here permanently or temporarily or whether such retailer or subsidiary
is admitted to do business within this state pursuant to the laws of the State of South
Dakota granting the rights of foreign corporations to do business in this state;
(13)
"Secretary," the secretary of the Department of Revenue and Regulation or any duly
authorized and appointed assistant, deputies, or agents of the secretary charged with the
administration or enforcement of this chapter;
(14)
"Soft drinks," any nonalcoholic beverages that contain natural or artificial sweeteners. The
term, soft drinks, does not include any beverage that contains milk or milk products, soy,
rice of similar milk substitutes, or greater than fifty percent of vegetable or fruit juice by
volume;
(15)
"Storage," any keeping or retention in this state for use or other consumption in the State
of South Dakota for any purpose except sale in the regular course of business;
(16)
"Tangible personal property," personal property that can be seen, weighed, measured, felt,
or touched, or that is in any other manner perceptible to the senses if furnished or
delivered to consumers or users within this state. The term includes electricity, water, gas,
steam, and prewritten computer software;
(16A) "Tobacco," any cigarettes, cigars, chewing or pipe tobacco, or any other item that contains
tobacco;
(17)
"Use," the exercise of right or power over tangible personal property or any product
transferred electronically incidental to the ownership of that property, except that it does
not include the sale of that property in the regular course of business. Use also includes
the use of the types of services, the gross receipts from the sale of which are to be
included in the measure of the tax imposed by chapter 10-45, and the delivery or causing
delivery into this state of tangible personal property or any product transferred
electronically intended to advertise any product or service or promote or facilitate any sale
to South Dakota residents.
Section 18. That chapter
10-45
be amended by adding thereto a NEW SECTION to read as
follows:
There is hereby created in the state treasury the municipal sales tax replacement fund. The state
treasurer shall annually transfer to the municipal sales tax replacement fund the sum of twenty-one
million dollars from the general fund.
Section 19. That chapter
10-45
be amended by adding thereto a NEW SECTION to read as
follows:
The secretary shall distribute to each incorporated municipality an amount equal to the money
deposited in the municipal sales tax replacement fund times the ratio of the sales and use tax remitted
to the municipality in the previous state fiscal year to the total amount of sales and use tax remitted
to all incorporated municipalities in the previous state fiscal year. The secretary shall make
distributions from the municipal sales tax replacement fund each March, June, September, and
December. The secretary shall approve vouchers and the state auditor shall draw warrants to pay
each incorporated municipality its share of the distribution.
Section 20. That chapter
10-45
be amended by adding thereto a NEW SECTION to read as
follows:
There is hereby created in the state treasury the Indian tribe sales tax replacement fund. The state
treasurer shall annually transfer to the Indian tribe sales tax replacement fund the sum of eight
hundred thousand dollars from the general fund.
Section 21. That chapter
10-45
be amended by adding thereto a NEW SECTION to read as
follows:
The secretary shall distribute to each Indian tribe that has entered into a tax collection agreement
that covers sales and use tax an amount equal to the money deposited in the Indian tribe sales tax
replacement fund times the ratio of the sales and use tax remitted to the Indian tribe in the previous
state fiscal year to the total amount of sales and use tax remitted to all Indian tribes in the previous
state fiscal year. The secretary shall make distributions from the Indian tribe sales tax replacement
fund each March, June, September, and December. The secretary shall approve vouchers and the
state auditor shall draw warrants to pay each Indian tribe its share of the distribution.
Section 22. That
§
§
28-1-70
to
28-1-77
, inclusive, be repealed.".