CHAPTER 56
(HB 1080)
Gross receipts defined for sales tax.
ENTITLED, An Act to
revise the definition of gross receipts for sales tax purposes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA:
Section
1.
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;
(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 require refrigeration;
(4)
"Delivery charges," charges by the retailer for preparation and delivery to a location
designated by the purchaser of tangible personal property or services including
transportation, shipping, postage, handling, crating, and packing;
(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 alcoholic
beverages, tobacco, or prepared food;
(6)
"Gross receipts," the total amount or consideration, including cash, credit, property, and
services, for which tangible personal property or services are sold, leased, or rented,
valued in money, whether received in money or otherwise, without any deduction for
the following:
(a)
The retailer's cost of the property or service sold;
(b)
The cost of materials used, labor or service cost, interest, losses, all costs of
transportation to the retailer, all taxes imposed on the retailer, and any other
expense of the retailer;
(c)
Except as provided in chapter 10-46A or 10-46B, charges by the retailer for any
services necessary to complete the sale whether or not separately stated,
including delivery charges; and
(d)
The value of exempt tangible personal property whether or not separately stated
on the invoice, billing, or similar document given to the purchaser where taxable
and exempt tangible personal property have been bundled together and sold by
the retailer as a single product or piece of merchandise;
Gross receipts do not include:
(a)
Discounts, including cash, term, or coupons that are not reimbursed by a third
party that are allowed by a retailer and taken by a purchaser on a sale;
(b)
Interest, financing, and carrying charges from credit extended on the sale of
tangible personal property or services, if the amount is separately stated on the
invoice, bill of sale or similar document given to the purchaser; and
(c)
Any taxes legally imposed directly on the consumer that are separately stated on
the invoice, bill of sale, or similar document given to the purchaser;
(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;
(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. 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
at retail by a person who does not hold himself or herself out as engaging in the business
of selling such tangible personal property 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.
Section
2.
That chapter
10-45
be amended by adding thereto a NEW SECTION to read as
follows:
For the purposes of this chapter, the term, gross receipts, means the total amount or
consideration, including cash, credit, property, and services, for which tangible personal property
or services are sold, leased, or rented, valued in money, whether received in money or otherwise,
without any deduction for the following:
(1) The retailer's cost of the property or service sold;
(2)
The cost of materials used, labor or service cost, interest, losses, all costs of
transportation to the retailer, all taxes imposed on the retailer, and any other expense of
the retailer; and
(3)
Except as provided in chapter 10-46A or 10-46B, charges by the retailer for any services
necessary to complete the sale whether or not separately stated, including delivery
charges.
Section
3.
That chapter
10-45
be amended by adding thereto a NEW SECTION to read as
follows:
Gross receipts, as defined in section 2 of this Act, include consideration received by the retailer
from third parties if:
(1) The retailer actually receives consideration from a party other than the purchaser and
the consideration is directly related to a price reduction or discount on the sale;
(2) The retailer has an obligation to pass the price reduction or discount through to the
purchaser;
(3) The amount of the consideration attributable to the sale is fixed and determined by the
retailer at the time of the sale of the item to the purchaser; and
(4) One of the following criteria is met:
(a) The purchaser presents a coupon, certificate, or other documentation to the
retailer to claim a price reduction or discount where the coupon, certificate, or
documentation is authorized, distributed, or granted by a third party with the
understanding that the third party will reimburse any retailer to whom the
coupon, certificate, or documentation is presented;
(b) The purchaser identifies himself or herself to the retailer as a member of a group
or organization entitled to a price reduction or discount (a preferred customer
card that is available to any patron does not constitute membership in such a
group); or
(c) The price reduction or discount is identified as a third party price reduction or
discount on the invoice received by the purchaser or on a coupon, certificate, or
other documentation presented by the purchaser.
For the purposes of this section, the purchaser is the end consumer.
Section
4.
That chapter
10-45
be amended by adding thereto a NEW SECTION to read as
follows:
Gross receipts, as defined in section 2 of this Act, do not include:
(1) Discounts, including cash, term, or coupons that are not reimbursed by a third party that
are allowed by a retailer and taken by a purchaser on a sale;
(2)
Interest, financing, and carrying charges from credit extended on the sale of tangible
personal property or services, if the amount is separately stated on the invoice, bill of
sale, or similar document given to the purchaser; and
(3)
Any taxes legally imposed directly on the consumer that are separately stated on the
invoice, bill of sale, or similar document given to the purchaser.
Section
5.
That
§
10-52A-1
be amended to read as follows:
10-52A-1.
Terms used in this chapter mean:
(1)
"Department," the Department of Revenue and Regulation
;
(2)
"Gross receipts," the total amount or consideration, including cash, credit, property, and
services, for which tangible personal property or services are sold, leased, or rented,
valued in money, whether received in money or otherwise, without any deduction for
the following:
(a)
The retailer's cost of the property or service sold;
(b)
The cost of materials used, labor or service cost, interest, losses, all costs of
transportation to the retailer, all taxes imposed on the retailer, and any other
expense of the retailer;
(c)
Except as provided in chapter 10-46A or 10-46B, charges by the retailer for any
services necessary to complete the sale whether or not separately stated,
including delivery charges; and
(d)
The value of exempt tangible personal property whether or not separately stated
on the invoice, billing, or similar document given to the purchaser where taxable
and exempt tangible personal property have been bundled together and sold by
the retailer as a single product or piece of merchandise;
Gross receipts do not include:
(a)
Discounts, including cash, term, or coupons that are not reimbursed by a third
party that are allowed by a retailer and taken by a purchaser on a sale;
(b)
Interest, financing, and carrying charges from credit extended on the sale of
tangible personal property or services, if the amount is separately stated on the
invoice, bill of sale or similar document given to the purchaser; and
(c)
Any taxes legally imposed directly on the consumer that are separately stated on
the invoice, bill of sale, or similar document given to the purchaser
.
Section
6.
That chapter
10-52A
be amended by adding thereto a NEW SECTION to read as
follows:
For the purposes of this chapter, the term, gross receipts, means the total amount or
consideration, including cash, credit, property, and services, for which tangible personal property
or services are sold, leased, or rented, valued in money, whether received in money or otherwise,
without any deduction for the following:
(1)
The retailer's cost of the property or service sold;
(2)
The cost of materials used, labor or service cost, interest, losses, all costs of
transportation to the retailer, all taxes imposed on the retailer, and any other expense of
the retailer; and
(3)
Except as provided in chapter 10-46A or 10-46B, charges by the retailer for any services
necessary to complete the sale whether or not separately stated, including delivery
charges.
Section
7.
That chapter
10-52A
be amended by adding thereto a NEW SECTION to read as
follows:
Gross receipts, as defined in section 6 of this Act, include consideration received by the retailer
from third parties if:
(1) The retailer actually receives consideration from a party other than the purchaser and
the consideration is directly related to a price reduction or discount on the sale;
(2) The retailer has an obligation to pass the price reduction or discount through to the
purchaser;
(3) The amount of the consideration attributable to the sale is fixed and determinable by the
retailer at the time of the sale of the item to the purchaser; and
(4) One of the following criteria is met:
(a) The purchaser presents a coupon, certificate, or other documentation to the
retailer to claim a price reduction or discount where the coupon, certificate, or
documentation is authorized, distributed, or granted by a third party with the
understanding that the third party will reimburse any retailer to whom the
coupon, certificate, or documentation is presented;
(b) The purchaser identifies himself or herself to the retailer as a member of a group
or organization entitled to a price reduction or discount (a preferred customer
card that is available to any patron does not constitute membership in such a
group); or
(c) The price reduction or discount is identified as a third party price reduction or
discount on the invoice received by the purchaser or on a coupon, certificate, or
other documentation presented by the purchaser.
For the purposes of this section, the purchaser is the end consumer.
Section
8.
That chapter
10-52A
be amended by adding thereto a NEW SECTION to read as
follows:
Gross receipts, as defined in section 6 of this Act, do not include:
(1) Discounts, including cash, term, or coupons that are not reimbursed by a third party that
are allowed by a retailer and taken by a purchaser on a sale;
(2)
Interest, financing, and carrying charges from credit extended on the sale of tangible
personal property or services, if the amount is separately stated on the invoice, bill of
sale, or similar document given to the purchaser; and
(3) Any taxes legally imposed directly on the consumer that are separately stated on the
invoice, bill of sale, or similar document given to the purchaser.
Signed February 6, 2007