State of South Dakota
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EIGHTY-SEVENTH SESSION
LEGISLATIVE ASSEMBLY, 2012
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400T0166
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SENATE BILL NO. 18
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Introduced by: The Committee on Taxation at the request of the Department of Revenue
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FOR AN ACT ENTITLED, An Act to revise certain provisions regarding references to the
Internal Revenue Code.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section 1. That § 10-4-9.1 be amended to read as follows:
10-4-9.1. Property owned by a public charity and used for charitable purposes is exempt
from taxation. A public charity is any organization or society which devotes its resources to the
relief of the poor, distressed, or underprivileged. A public charity shall receive a majority of its
revenue from donations, public funds, membership fees, or program fees generated solely to
cover operating expenses; it shall lessen a governmental burden by providing its services to
people who would otherwise use governmental services; it shall offer its services to people
regardless of their ability to pay for such services; it shall be nonprofit and recognized as an
exempt organization under section 501(c)(3) of the United States Internal Revenue Code, as
amended and in effect on January 1, 2011 2012; and it may not have any of its assets available
to any private interest.
Section 2. That § 10-4-9.2 be amended to read as follows:
10-4-9.2. Property owned by a benevolent organization and used exclusively for benevolent
purposes is exempt from taxation. A benevolent organization is any lodge, patriotic
organization, memorial association, educational association, cemetery association, or similar
association. A benevolent organization shall be nonprofit and recognized as an exempt
organization under section 501(c)(3), 501(c)(7), 501(c)(8), 501(c)(10), or 501(c)(19) of the
United States Internal Revenue Code, as amended and in effect on January 1, 2011 2012.
However, if any such property consists of improved or unimproved property located within a
municipality not occupied or directly used in carrying out the primary objective of the
benevolent organization owning the same, such property shall be taxed the same as other
property of the same class is taxed. However, if any such property consists of agricultural land,
such property shall be taxed the same as other property of the same class is taxed. For the
purposes of this section, an educational association is a group of accredited elementary,
secondary or postsecondary schools. For the purposes of this section, a benevolent organization
also includes a congressionally chartered veterans organization which is nonprofit and
recognized as an exempt organization under section 501(c)(4) of the United States Internal
Revenue Code, as amended and in effect on January 1, 2011 2012.
For purposes of this section, benevolent purpose means an activity that serves the poor,
distressed or underprivileged, promotes the physical or mental welfare of youths or
disadvantaged individuals, or relieves a government burden.
Section 3. That § 10-4-9.3 be amended to read as follows:
10-4-9.3. Property owned by any corporation, organization, or society and used primarily
for human health care and health care related purposes is exempt from taxation. Such
corporation, organization or society shall be nonprofit and recognized as an exempt organization
under section 501(c)(3) of the United States Internal Revenue Code, as amended and in effect
on January 1, 2011 2012, and none of its assets may be available to any private interest. The
property shall be a health care facility licensed pursuant to chapter 34-12, orphanage, mental
health center or community support provider regulated under chapter 27A-5, or camp. The
facility shall admit all persons for treatment consistent with the facility's ability to provide health
care services required by the patient until the facility is filled to its ordinary capacity and
conform to all applicable regulations of and permit inspections by the state as otherwise
provided by law.
Section 4. That § 10-4-9.4 be amended to read as follows:
10-4-9.4. Any congregate housing facility owned by a corporation, organization, or society
is exempt from certain property taxes, if the facility provides certain health care services and is
recognized as an exempt nonprofit corporation, organization, or society under section 501(c)(3)
of the United States Internal Revenue Code, as amended and in effect on January 1, 2011 2012,
and if none of its assets are available to any private interest. A congregate housing facility does
provide health care services if the facility is an independent group-living environment operated
and owned by a health care facility licensed pursuant to chapter 34-12 which offers a continuum
of care, residential accommodations, and supporting services primarily for persons at least sixty-two years of age or disabled as defined pursuant to chapter 10-6A. Supporting services include
the ability to provide health care and a food service that satisfies a balanced nutrition program.
As part of the statement required by § 10-4-19, the owner of the congregate housing facility
shall submit a statement to the county director of equalization listing the health cares services
provided and method used to satisfy the balanced nutrition program.
In addition, no owner may apply for a property tax exemption for a congregate housing
facility constructed after July 1, 2004, unless the congregate housing facility:
(1) Consists of two or more individual housing units located within one structure; and
(2) Not more than twenty-five percent of the individual housing units exceed fifteen
hundred square feet.
Section 5. That § 10-4-39 be amended to read as follows:
10-4-39. Any facility operated as a multi-tenant business incubator and owned by an entity
recognized as an exempt nonprofit corporation pursuant to section 501(c)(3), 501(c)(4), or
501(c)(6) of the Internal Revenue Code as amended and in effect on January 1, 2011 2012, is
exempt from property taxation. A business incubator is any facility that supports the
development and operation of a number of small start-up businesses. Tenants of the facility may
share a number of support services and the tenants may receive technical assistance, business
planning, legal, financial, and marketing advice. If any portion of the facility is occupied by an
incubated business for more than five years, that portion of the facility shall be taxed as other
property of the same class is taxed.
Section 6. That subdivision (7) of § 10-6A-1 be amended to read as follows:
(7) "Income," the sum of adjusted gross income as defined in the United States Internal
Revenue Code, as amended and in effect on January 1, 2011 2012, and IRA
disbursements, the amount of capital gains excluded from adjusted gross income,
alimony, support money, nontaxable strike benefits, cash public assistance and relief,
the gross amount of any pension or annuity, including Railroad Retirement Act
benefits and veterans disability pensions, all payments received under the federal
social security and state unemployment insurance laws, nontaxable interest, life
insurance proceeds that exceed twenty thousand dollars, any gift or inheritance that
exceeds five hundred dollars, proceeds from a court action, any sale of a personal
item that exceeds five hundred dollars, foster care income, and workers'
compensation;
Section 7. That subdivision (5) of § 10-6B-1 be amended to read as follows:
(5) "Income," the sum of adjusted gross income as defined in the United States Internal
Revenue Code, as amended and in effect on January 1, 2011 2012, and all nontaxable
income, including the amount of capital gains excluded from adjusted gross income,
alimony, support money, nontaxable strike benefits, cash, public assistance and relief,
not including relief granted under this chapter, the gross amount of any pension or
annuity, including Railroad Retirement Act benefits and veterans' disability pensions,
all payments received under the federal social security and state unemployment
insurance laws, nontaxable interest received from the federal government or any of
its instrumentalities, workers' compensation, and the gross amount of "loss of time"
insurance, but not including gifts from nongovernmental sources, food stamps, or
surplus foods or other relief in kind provided by a public agency less real estate taxes
payable on the applicant's principal residence for the year in which application is
made;
Section 8. That subdivision (6) of § 10-18A-1 be amended to read as follows:
(6) "Income," the sum of adjusted gross income as defined in the United States Internal
Revenue Code, as amended and in effect on January 1,
2011 2012 and all nontaxable
income, including the amount of capital gains excluded from adjusted gross income,
alimony, support money, nontaxable strike benefits, cash public assistance and relief,
not including relief granted under this chapter, the gross amount of any pension or
annuity, including Railroad Retirement Act benefits and veterans' disability pensions,
all payments received under the federal social security and state unemployment
insurance laws, nontaxable interest received from the federal government or any of
its instrumentalities, workers' compensation, and the gross amount of loss of time
insurance, but not including gifts from nongovernmental sources, food stamps, or
surplus foods, or other relief in kind provided by a public agency less real estate taxes
payable on the applicant's principal residence for the year in which application is
made. However, the reduction in the applicant's income for real estate taxes payable
may not exceed four hundred dollars;
Section 9. That § 10-43-10.1 be amended to read as follows:
10-43-10.1. Net income, in the case of a financial institution, is taxable income as defined
in the Internal Revenue Code, as amended and in effect on January 1, 2011 2012, 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), as amended, and in effect on January 1, 1997, 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.
Section 10. That subdivision (5) of § 10-45A-1 be amended to read as follows:
(5) "Income," the sum of adjusted gross income as defined in the United States Internal
Revenue Code, as amended and in effect on January 1,
2011 2012, and all nontaxable
income, including the amount of capital gains excluded from adjusted gross income,
alimony, support money, nontaxable strike benefits, cash public assistance and relief,
not including relief granted under this chapter, the gross amount of any pension or
annuity, including Railroad Retirement Act benefits and veterans' disability pensions,
all payments received under the federal social security and state unemployment
insurance laws, nontaxable interest received from the federal government or any of
its instrumentalities, workers' compensation, and the gross amount of loss of time
insurance, but not including gifts from nongovernmental sources, food stamps, or
surplus foods, or other relief in kind provided by a public agency, less real estate
taxes payable or ten percent of rent paid on the applicant's principal residence for the
year in which application is made. However, the reduction in the individual's income
may not exceed four hundred dollars;
Section 11. That § 35-4-11.9 be amended to read as follows:
35-4-11.9. The renewal fee for any on-sale license issued outside a municipality to a
nonprofit organization, recognized as an exempt organization under section 501(c)(7) or
501(c)(19) of the United States Internal Revenue Code of 1986, as amended and in effect on
January 1,
2011 2012, which will be in operation less than one hundred fifty days each year shall
be established by the county commission at a rate not to exceed the rate in the nearest
municipality.