Wednesday, July 2, 2014

July E-News

Check out our latest E-News:

  • Municiptal Tax Updates
  • Upcoming Education Dates
  • Play It Again Lottery Game
  • Motor Fuel Addming More Licenses to EPath
  • Summer Legislative Meetings
  • And more...
Sign-up for the DOR Newsletters at dorsocmed@state.sd.us.

Tuesday, July 1, 2014

July Education Dates

Sign-up for one of our Basic Tax Seminars in Aberdeen or Mitchell.  These seminars offer information about Sales Tax and Contractors' Excise Tax. 
 
The Basic Sales Tax workshops cover topics such as
  • how and when to apply for a tax license
  • exemptions from sales and use taxes
  • exempt entities
  • use tax
  • municipal taxes
  • purchases for resale
  • how to file sales tax returns by paper and electronically through EPath.
The Basic Contractors' Excise Tax workshops cover
  • how and when to apply for a contractors' excise tax license
  • projects for qualifying utilities and governmental agencies
  • prime and subcontractors
  • sales and use tax
  • owner-furnished materials
  • reservation projects
  • how to file contractors' excise tax returns by paper or electronically through EPath.
Classes will be offered in Aberdeen, July 15th and Mitchell, July 16th.  For more information regarding these classes, contact Jean Person, Business Education Coordinator at 605.773.3311 or business.education@state.sd.us.

Thursday, June 26, 2014

EPath Payment Change Due to Holiday

Due to the 4th of July next Friday, the next week's EPath payment date is changed to Thursday, July 3rd.  To make a payment on July 3, you will need to submit your payment on or before July 1st.  This date is listed in the payment date drop-down box.


If you have any further questions, review the EPath Help or contact the DOR office at 1.888.829.9188.

Monday, June 9, 2014

All Air Transportation Services are Not Subject to South Dakota Sales or Use Tax


Effective immediately all air transportation services are not subject to South Dakota sales or use tax.
 
The Department of Revenue has determined that the Federal Anti-Head Tax Act (49 United States Code § 40116) of 1973 exempts gross receipts  received for intrastate and interstate air transportation services from South Dakota sales tax.  Your business is still responsible for sales or use tax on the sale of any taxable product or service.

Your business may be affected if you provide any of the following services:
  • Aerial sightseeing services (i.e., airplane, helicopter, balloon, dirigible and blimp rides.
  • Air transportation services
  • Air Ambulance services
  • Any air transportation service in Federal Airways
Air transportation services provided with other taxable services for one non-itemized charge are taxable.

For example: Sky diving lessons are subject to sales tax.
  • If there is a single charge for the lessons and flight, the entire charge is taxable. 
  • If the charge for the lessons and flight are separately stated, the charge for the lessons are taxable and the charge for the flight is exempt.            

 Our agents are available to assist you with any questions you may have.  You may contact the Department at 1-800-829-9188 or you may visit one of our field offices located in Aberdeen, Watertown, Sioux Falls, Yankton, Mitchell, Rapid City or Pierre.

Friday, June 6, 2014

Sales and Use Tax


SALES TAX:  The sales tax rate of 4% applies to the gross receipts of the retail sale, lease, or rental of:

w  tangible personal property
w  products transferred electronically
w  services

POINT OF POSSESSION:  Sales tax applies where the customer receives the product or service.  Products or services delivered to a location outside of South Dakota are not subject to South Dakota sales tax, but may be subject to that state’s tax.  Sales to non-residents are taxable if possession is taken in South Dakota.


GROSS RECEIPTS:  total amount of money or other consideration received for products sold, leased, or rented

GROSS RECEIPTS INCLUDE:


w  Taxable and Nontaxable Sales
w  Barters
w  Reimbursable Expenses (except for accountants and attorneys)
w  Delivery charges (shipping, handling, crating, etc.)
w  Special Jurisdiction Sales
w  Lottery Receipts

NO DEDUCTIONS FOR:
w  Cost of product or service sold
w  Expenses
w  Charges for services necessary to complete the sale, including delivery charges


GROSS RECEIPTS DO NOT INCLUDE:

w  Credit or trade-in value
w  Fees or other interest for late charges on overdue accounts, no account, or insufficient funds checks
w  Discounts not reimbursed by a 3rd party (may include cash discounts, early payment discounts, or store coupons)

MUNICIPAL TAX:  Cities may impose a tax of up to 2% that applies to all products and services that are subject to the state sales or use tax. Municipal tax applies when a product or service is used, stored, or consumed within a city that imposes a tax.
USE TAX:  The purchaser, or consumer, is responsible for paying use tax.  Use tax applies on all products and services that are used, stored, or consumed in South Dakota when South Dakota’s sales tax has not been paid.  State and municipal use tax rates are the same as the State sales and municipal tax rates. 
Examples of items often assessed use tax include:
w  Computers                                                                        w  Manufacturing Equipment
w  Meals Furnished for Employees                                    w  Donations
w  Promotional Gifts                                                             w  Office Supplies
w  Farm Equipment                                                              w  Leases of Equipment
w  Software and Support                                                     w  Tools
w  Snow Removal                                                                 w  Consulting Services
w  Accounting Services                                                        w  Architectural Services
w  Engineering Services
RECIPROCITY:  Credit is allowed for sales or use tax legally due and paid on a product or service in another state against the amount of tax due in South Dakota if the other state provides a like credit.
w  If the tax paid is the same or more than the South Dakota state and municipal tax due, no
additional tax is due in South Dakota.
w  If the tax paid to another state is less than the South Dakota state and municipal tax, the difference in the tax must be paid to South Dakota.
Example:  A computer is purchased and picked up in Nebraska for use by a Sioux Falls business.  The Nebraska store is paid $527.50 ($500 + 5.5% Nebraska sales tax).  Because the South Dakota state plus the Sioux Falls municipal tax is 6%, the difference of $2.50 must be paid to South Dakota.



Monday, June 2, 2014

Transient Vendors: Get the Facts Before You Buy

Transient vendor season is underway in South Dakota, a time when out-of-state vendors roll into the state to sell their products and services. While many of the vendors are legitimate, the South Dakota Department of Revenue advises people to take common-sense steps to ensure vendors are reputable before doing business with them.

If you are considering hiring a person to provide repair or construction services, the department advises you to:
 
  •  Ask for a price quote, in advance, in writing.
  •  Question the contractor about a permanent address and telephone number, and do not assume that if the information they provide is local, they are a local business. Transient vendors often have business cards printed with local mailing services or motel addresses and telephone numbers.
  •  Ask for a list of local references and check them before making a decision.
  •  Ask if the contractor has worker’s compensation and general liability insurance. If vendors are not properly insured, homeowners may be liable for accidents that occur on their property.
  •  Be careful about paying for work in advance; before making final payments, make sure transient vendors have paid their local suppliers or you may be held liable for unpaid materials.
  •  Make sure you are completely satisfied with the work before paying the bill, and do not pay more for the job than originally quoted unless you have given written approval for the additional work or cost.
 
Out-of-state vendors often travel to South Dakota to sell items like fruit, seafood, meat packages, paintings, magazine subscriptions, rugs, T-shirts, sunglasses, household cleaners, furniture, stuffed animals, and asphalting and roofing services. Asking the right questions when approached by those vendors can help you avoid making a purchase you may regret:
 
  •  Question the salesperson about the product, warranties, guarantees, etc.
  •  Get something in writing with the company’s name, address and phone number.
  •  Ask to see their current South Dakota tax license. State law requires everyone selling products or services to have a current South Dakota sales or contractors’ excise tax license. To verify if the license is valid, call the Department’s toll-free helpline at (800) 829-9188.
 
All sellers must provide you with a contract or receipt at the time of sale showing the date, the merchant’s name and address, and a statement informing you of your right to cancel the contract within three days. After proper cancellation, the seller has 10 days to refund your money.
 
If you have doubts about the vendor or think you may have been the victim of a scam, call your local police department or county sheriff’s office immediately. You can also contact the Attorney General’s Consumer Protection Office at (800) 300-1986 or by email at
consumerhelp@state.sd.us. Be prepared to give as much information as you can about the vendor, including the name of the company and salesperson; company address and telephone number; and make, model and license number (if possible) of the vehicle the vendor was driving. Without tips from the public, law enforcement officials may not be able to catch illegal vendors before they move on to the next community.

For more information on transient vendors, contact the South Dakota Department of Revenue’s toll-free helpline at (800) 829-9188, press "1" for the Business Tax Division.

Tuesday, May 27, 2014

What is the Municipal Gross Receipts (bed, board, and booze) tax?

Cities can impose a general sales tax rate of up to 2%. This is in addition to the State's 4% sales tax rate. Cities may also impose an additional 1%, over and above their general rate, for any or all of the following:
  • Lodging
  • Alcohol
  • Eating Establishments
  • Admissions

Additional information on this tax can be found on page 9 of the Municipal Tax Guide, 1.800.829.9188 or bustax@state.sd.us.