Wednesday, October 22, 2014

South Dakota & Iowa Border Sales/Use Tax Issues Webinar

Recently, South Dakota and Iowa did a joint webinar to help inform taxpayers of Border Sales/Use Tax Issues.  Watch the webinar to learn more about these taxes and read below the Questions and Answers that were brought up during the webinar.


Watch more of DOR's E-Learning videos.




Q:  We have a client that provides marital arts instruction. They also sale gear, uniforms, etc to their customers. They have a location in Iowa and South Dakota. All fees are collected at the Iowa location and the customer can use either location. Which parts are taxable, and in which state do we pay the tax?


A (Iowa):   Martial arts instruction is not a taxable service in Iowa. The sale of the gear, uniforms, etc. is the taxable sale of tangible personal property and Iowa tax is due if delivery occurs in Iowa.


A (South Dakota):   Clubs that have multiple locations are taxed where the member receives their membership information. If they purchase at a club location, tax applies there. If purchased on-line, by phone, or mail, tax applies based on the member’s address. Use tax would still apply on any equipment or items used at the South Dakota location where no sales tax was previously paid. Any products sold would be subject to sales tax based on where the customer first takes possession of the item.


Q:  Our facility is located outside city limits....so if i have a computer delivered and set up we only pay the state tax  but if I have filters that go into our trucks delivered to our office we put them in the trucks and drive to town I will need to pay the city sales tax? Am I understanding this correctly?


A (Iowa):   For Iowa purposes, if delivery occurs in a local option area, both state sales tax and local option sales tax will apply.  If delivery occurs outside of a local option tax area, then only the state sales tax applies.  This is assuming that the customer is not tax exempt for some reason.


A (South Dakota):   City tax is applied the same as state tax. Tangible Personal Property (TPP) is taxable where possession is taken. If the item is later used in a city that imposes a city tax, that city tax is due, however, credit is given for any city tax previously paid.




Q:  If we purchase an item from another state to be used in city in IA that has a local tax of 1%, would we only owe 6% use tax and not the 1% local option tax?


A (Iowa):   That is generally correct.  The Iowa consumers use tax rate is 6%.  The local option tax does not apply to use tax.  




Q:  When filing our SD sales tax return, should our gross sales reflect all gross sales from all states, or only our gross sales in SD?


A (South Dakota):   If your business is located inside South Dakota then gross sales should include all sales (taxable and non-taxable) made in South Dakota and all states. Out-of-state business should include only their South Dakota sales in the gross sales line.


 
Q:  Question regarding IA exempt services. My company manufactures bulk commodity trailers, we also have repair shops where we will repair a customers trailers. These are licensed vehicles. Bullet #4 does not pertain to our repair of a customers trailer correct? This question would be for both SD and IA.


A (Iowa):   The repairs would be taxable in Iowa. The bullet point referenced, “Services that recondition or repair tangible personal property when that property is normally sold in the regular course of the retailer’s business,” applies to repairs on merchandise not yet sold.


A (South Dakota):   Services such as trailer repair are subject to state and municipal sales tax. These services are taxed according to where the customer receives the repaired item. Tax applies at the customer’s location if the item is delivered to the customer’s location after the repair is completed. Tax applies at the repair shop if the repaired item is picked up at the repair shop.
 


Q:  We have a Nebraska company delivering pop to a SD location and they are not charging SD tax.  They are in process of updating tax software.   Can we include tax in payment of invoice?


A (South Dakota):   Additional information is needed to properly answer the question. We need to find out how the product is being used in South Dakota; more details are needed about the transaction. Please contact the South Dakota Department of Revenue at 1-800-829-9188 for clarification so we can provide you the correct answer.




Q:  So in Iowa, if an employee cleans the business office where they work for the employer to make extra money, the employer doesn't have to add sales tax to the amount paid to the employee?


A (Iowa):   If you performed this service as part of your duties as an employee, no tax is due.  If you are being paid outside of your duties as an employee as an independent contractor, then sales tax will be due. 




Q:  On your reciprocity example where the computer was purchased in SD and you still owe IA 2% sales tax - how do you put that on the report?


A (Iowa):   You will need to back into the correct amount due in order to make this work when you file your Iowa sales or use tax return.  In other words, enter an amount that when multiplied by the Iowa state rate of 6%, will result in the correct amount of additional tax due.




Q:  For Iowa, if we are a law firm that sometimes travels to Iowa for court or other business, do we need to get a permit?


A (Iowa):   The services of an attorney are not taxable services in Iowa, so no Iowa sales/use tax permit is needed for these services.




Q:  Do we need to have farmers fill out exemption certificates if the purchases they are making are non taxable items, such as livestock feed and medicine?


A (Iowa):   For Iowa purposes, an exemption certificate is required to document non-taxable purchases in this situation.


A (South Dakota):   State law exempts certain products or services from sales or use tax based on how the product or service is used. If there is doubt as to the intended usage for agricultural purposes on items that could be exempt, the seller should obtain an exemption certificate signed by the farmer. Medicines for livestock and pets are subject to the 4% state sales tax, plus applicable municipal tax. Medicine mixed with feed or feed supplements prior to being sold are not registered as remedies, but as feed supplements. Feed supplements for livestock are exempt from sales tax. More information on the agricultural industry can be found at http://dor.sd.gov/Taxes/Business_Taxes/Publications/PDFs/agriculture0713.pdf or by calling the South Dakota Department of Revenue at 1-800-829-9188.

Tuesday, September 2, 2014

Join the DOR Team!

The Department of Revenue is hiring!


Bank Franchise Tax Specialist (Accountant II) - Job ID 3637
   Location:  Pierre
   Closing Date:  09/16/2014

Revenue Supervisor - Job ID 3635
   Location:  Pierre
   Closing Date: 09/16/2014

Director of Video Lottery and Security (Lottery Division) - Job ID 3591
   Location:  Pierre
   Closing Date:  09/10/2014

Executive Assistant - Job ID 3613
  Location:  Pierre
  Closing Date:  09/08/2014

Staff Attorney - Job ID 3036
   Location:  Pierre


Go to http://bhr.sd.gov/workforus.aspx and apply today!

Friday, August 22, 2014

Division of Motor Vehicles - Dealer Licensing

South Dakota requires that people who engage in the business of selling vehicles, whether exclusively or in addition to any other occupation have a motor vehicle dealer license.
All businesses must become licensed with the Division of Motor Vehicles before any sales transactions may occur. Also, it is recommended that applicants contact the division prior to submitting a license application to make sure that the name you want to use for your business is not already in use.

Prospective Dealer Notice
All licensed dealers are required to use the on-line system, SD Cars. For more information, please contact the Division of Motor Vehicles at: motorv@state.sd.us; phone 605-773-3541; or Fax 605-773-2549.

Information available on-line at: www.SDcars.org

Dealer Agents are available across the state to answer questions, provide information and training.

Contact any of the Dealer Agents: 

Tuesday, August 5, 2014

Join the DOR Team!

Join the Department of Revenue, Division of Motor Vehicles!

Title:  Revenue Supervisor
Closing date:  08/11/2014

The Division of Motor Vehicles is seeking a motivated individual to lead the Dealer Program and Field Services section. This position will oversee all licensed vehicle dealerships in the state by monitoring overall compliance with South Dakota law; while examining efficiencies and developing plans for productivity improvements in the program.

The Revenue Supervisor will directly oversee the staff within the Dealer Program who support the licensed dealers with training and instruction on compliance and procedures, enforcement of laws and regulations, investigation of complaints and violations, and answering questions dealers may have about the Dealer Program and the titling process. The incumbent must learn state laws related to tax, titling and registration of motor vehicles and laws related to motor vehicle dealer licensing. The Revenue Supervisor will work directly with licensed dealers or applicants to educate them and their staff on licensing laws and requirements. This involves visiting dealerships to meet with dealer staff and review business practices. The Revenue Supervisor must also continuously look for ways to improve policies, practices and customer service.

Duties will include prioritizing and monitoring staff activities, providing technical assistance on licensing and renewal requirements, bonding and insurance requirements, dealer plates and permits and record keeping regulations. This position will work closely with Licensed Dealers, County Offices, public officials, and other customers to provide technical guidance; and provides information on licensing/renewal requirements, principal place of business requirements, bonding and insurance requirements, fees, dealer plates and permits, title and registration, record-keeping requirements, violation penalty provisions, etc.

If interested, learn more about the position and apply!

Thursday, July 31, 2014

Reminders in the "Taxes on the Campaign Trail" Tax Facts

All supplies and equipment the committees or candidates purchase, that will not be resold, are subject to sales or use tax when purchased. Promotional items given free to the public, contributors, or staff are taxable when purchased.

Examples of taxable services and products you may purchase:

ü  Campaign managers

ü  Calling centers

ü  Consulting

ü  Phone solicitation

ü  Photography

ü  Survey or polling

ü  Temporary help

ü  Paid labor such as walkers, stuffers, and drivers to place or remove and dispose of signs

ü  Bags

ü  Bumper stickers

ü  Buttons

ü  Calendars

ü  Flyers

ü  Jackets, T-shirts, Hats

ü  Note pads

ü  Pens

ü  Posters, Yard signs

 Continue reading about the Taxes on the Campagin Trail Tax Facts or any other DOR Tax Facts. For further questions, please call 1.800.829.9188 or email at bustax@state.sd.us

Wednesday, July 30, 2014

Tuesday, July 29, 2014

New Fishing & Hunting Tax Fact

The sale of fishing or hunting services and products are subject to state sales tax. Tourism tax, municipal sales tax, and municipal gross receipts may also apply.

Effective immediately:

  • You may purchase food, beverages and ammunition you sell separately or as part of your fishing or hunting package without sales or use tax.
 
  • You must pay sales or use tax on any item you purchase that is not being sold and any item that is used or consumed by your business.  


Read the Fishing and Hunting Services Tax Facts for information on taxes that apply to these services.
 
Learn more information regarding DOR's Tax Facts.