House Taxation Minutes 02/25/1997 7:45 AM

Roll Call
P      Apa
P      Belatti
P      Brown (Richard)
P      Diedrich
P      Koskan
P      Napoli
P      Peterson (Bill)
P      Barker
P      Kazmerzak
P      Moore
P      Waltman
P      Wick, Vice-Chair
P      Cutler, Chair

OTHERS PRESENT: See Original Minutes

The meeting was called to order by Chair Cutler.

MOTION:      TO APPROVE THE MINUTES OF FEBRUARY 20, 1997

Moved by:      Representative Koskan
Second by:      Representative Moore
Action:      Prevailed by voice vote.

          SB 188: to revise the property exempt from execution, attachment, garnishment, seizure, or taking by any legal process and to provide certain exceptions.

Proponents:      Representative Roger Hunt, sponsor, Brandon
Opponents:      Tom Adam, SD Bankers' Association, Pierre
          Dean Krogman, SD Bill Collectors' Association, Aberdeen
Presented by:      Senator Keith Paisley, prime sponsor, Sioux Falls
Comments by:      Ron Olinger, representing self, Pierre

MOTION:      DO PASS SB 188

Moved by:      Representative Barker
Second by:      Representative Belatti

Action:      Prevailed by roll call vote. (7-5-1-0)

Voting yes:      Belatti, Diedrich, Napoli, Barker, Waltman, Wick, Cutler

Voting no:      Apa, Koskan, Peterson (Bill), Kazmerzak, Moore

Excused:      Brown (Richard)

          SB 191: to allow the payment of gross receipts tax on the rental of certain trailers and to declare an emergency.

Proponents:      Jim Keyes, Associated General Contractors, Pierre
          Pat Healy, Diesel Machinery, Sioux Falls
Opponents:      None.
Presented by:      Senator Keith Paisley, prime sponsor, Sioux Falls
Comments by:      Deb Hillmer, Director, Division of Motor Vehicles, Department of Revenue, Pierre

MOTION:      DO PASS SB 191

Moved by:      Representative Barker
Second by:      Representative Wick
Action:      Prevailed by roll call vote. (13-0-0-0)

Voting yes:      Apa, Belatti, Brown (Richard), Diedrich, Koskan, Napoli, Peterson (Bill), Barker, Kazmerzak, Moore, Waltman, Wick, Cutler

MOTION:      PLACE SB 191 ON CONSENT

Moved by:      Representative Wick
Second by:      Representative Koskan
Action:      Prevailed by voice vote.

          SB 117: to increase the allowable value of an estate from which personal property may be collected by affidavit.

Proponents:      None.
Opponents:      None.
Presented by:      Senator Jim Hutmacher, prime sponsor, Chamberlain

MOTION:      DO PASS SB 117

Moved by:      Representative Moore
Second by:      Representative Napoli
Action:      Prevailed by roll call vote. (12-0-1-0)

Voting yes:      Apa, Belatti, Brown (Richard), Diedrich, Napoli, Peterson (Bill), Barker, Kazmerzak, Moore, Waltman, Wick, Cutler

Excused:      Koskan

MOTION:      PLACE SB 117 ON CONSENT

Moved by:      Representative Brown (Richard)
Second by:      Representative Peterson (Bill)
Action:      Prevailed by voice vote.

          SB 230: to provide for a refund of certain taxes attributed to the construction of new residential housing.

Proponents:      Senator Gerald Lange, prime sponsor, Madison (Documents 1, 2, and 3)
          Mike Schultz, Mike Schultz Construction, realtor, Brandon
          Glen Kane, K & L Construction, Rapid City
          Dean Krogman, SD Association of Realtors, Pierre
        Mark Peterson, SD Home Builders' Association, real estate appraiser, Sioux Falls
Opponents:      Scott Peterson, Director, Business Tax Division, Department of Revenue, Pierre
Presented by:      Representative Bill Peterson, sponsor, Sioux Falls
Comments by:      Tim Dougherty, SD Home Builders' Association, Sioux Falls (for clarification)

MOTION:      DO PASS SB 230

Moved by:      Representative Peterson (Bill)
Second by:      Representative Brown (Richard)
Action:      Was not acted on.

MOTION:      CALL THE QUESTION

Moved by:      Representative Belatti
Second by:      Representative Napoli
Action:      Prevailed by voice vote.

MOTION:      PREVIOUS MOTION DO PASS SB 230

Action: Prevailed by roll call vote. (10-3-0-0)

Voting yes:      Apa, Belatti, Brown (Richard), Napoli, Peterson (Bill), Barker, Kazmerzak, Moore, Waltman, Wick

Voting no:      Diedrich, Koskan, Cutler

          SB 13: to revise the tax refund provisions for agricultural facilities.

Presented by:      Scott Peterson, Director, Business Tax Division, Department of Revenue, Pierre

MOTION:      AMEND SB 13
                                                f-13t

On the printed bill, delete everything after the enacting clause and insert:

" Section 1. That § 10-45-12.1 be amended to read as follows:

10-45-12.1. The following services 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 are exempt from the provisions of this chapter: health services (major group 80); educational services (major group 82) except schools and educational services not elsewhere classified (industry no. 8299); social services (major group 83); agricultural services (major group 07) except veterinarian services (group no. 074) and animal specialty services, except veterinary (industry no. 0752); forestry services (group no. 085); radio and television broadcasting (group no. 483); railroad transportation (major group 40); local and suburban passenger transportation (group no. 411) except limousine services; school buses (group no. 415); farm product warehousing and storage (industry no. 4221); establishments primarily engaged in transportation on rivers and canals (group no. 444); establishments primarily engaged in air transportation, certified carriers (group no. 451) , except for the transportation of tangible personal property if both the origin and destination of the tangible personal property are within this state ; establishments primarily engaged in air transportation, noncertified carriers (group no. 452) except chartered flights (industry no. 4522) , the transportation of tangible personal property if both the origin and destination of the tangible personal property are within this state, and airplane, helicopter, balloon, dirigible and blimp rides for amusement or sightseeing; pipe lines, except natural gas (major group 46); arrangement of passenger transportation (group no. 472); arrangement of transportation of freight and cargo (group no. 473) , except for the arrangement of the transportation of tangible personal property if both the origin and destination of the tangible personal property are within this state ; rental of railroad cars (group no. 474); water supply (industry no. 4941); sewerage systems (industry no. 4952); security brokers, dealers and flotation companies (group no. 621); commodity contracts brokers and dealers (group no. 622); credit counseling services provided by individual and family social services (group no. 8322); construction services (division C) except industry no. 1752; consumer credit reporting agencies, mercantile reporting agencies, and adjustment and collection agencies (group no. 732), if the debt was incurred out-of-state and the client does not reside within the state. The following are also specifically exempt from the provisions of this chapter: financial services of institutions subject to tax under chapter 10-43 including loan origination fees, late payment charges, nonsufficient fund check charges, stop payment charges, safe deposit box rent, exchange charges, commission on travelers checks, charges for administration of trusts, interest charges, and "points" charged on loans; commissions earned or service fees paid by an insurance company to an agent or representative for the sale of a policy; services of brokers and agents licensed under Title 47; the sale of trading stamps; rentals of motor vehicles as defined by § 32-5-1 leased under a single contract for more than twenty-eight days; advertising services; services provided by any corporation to another corporation which is centrally assessed having identical ownership and services provided by any corporation to a wholly owned subsidiary which is centrally assessed; continuing education programs, tutoring, vocational counseling, except rehabilitation counseling and motion picture rentals to a commercially operated theater primarily engaged in the exhibition of motion pictures; and charges made by a

telecommunications company for the origination, transmission, switching, reception or termination of an interstate telephone or telegraph communication.

Section 2. That § 10-45-80 be amended to read as follows:

10-45-80. For any small package delivery company which has an established pricing and billing mechanism that does not correspond to state boundaries, the tax imposed by § § 10-45-70 and 10-46-57 shall be paid as follows:

(2) For transportation services rendered to customers of the small package delivery company which are not licensed to collect and remit the tax imposed by this chapter, the small package delivery company and the secretary of revenue shall enter into an agreement concerning the determination of the value of the small package delivery company's taxable transportation services rendered to such customers. This subdivision does not prohibit the small package delivery company from passing the burden of the tax on to such customers.

For purposes of this section, a small package delivery company is a small package transportation service, courier service, or parcel service which has an established pricing and billing mechanism that does not correspond to state boundaries that is primarily engaged in the transportation and delivery of packages generally weighing less than one hundred fifty pounds. In lieu of paying the tax imposed by § § 10-45-70 and 10-46-57 upon actual gross receipts, a small package delivery company may enter into an agreement with the secretary of revenue to determine such company's taxable gross receipts from South Dakota intrastate transportation services. "