South Dakota Administrative Rules
Title 64 - REVENUE
Article 64:01 - Administration
Chapter 64:01:01 - Administration of department
Section 64:01:01:45 - Requirements for electronic data interchange

If a taxpayer uses electronic data interchange processes and technology, the level of record detail, in combination with other records related to the transactions, must be equivalent to that contained in an acceptable paper record. The retained records shall include vendor name, invoice date, product description, quantity, price, amount and type of tax, and shipping information. Codes may be used to identify the data elements, provided that the retailer provides a code list or other method to allow the department to interpret the coded information.

The taxpayer may capture the necessary information at any level within the accounting system and need not retain the original EDI transaction records provided the audit trail, authenticity, and integrity of the retained records can be established.

General Authority: SDCL 10-45-47.1(4), 10-45D-13(4), 10-46-35.1(4), 10-46A-19(4), 10-46B-18(4), 10-46E-11(4), 10-47B-2, 10-52A-7(4).

Law Implemented: SDCL 10-45-45, 10-45D-12, 10-46-39, 10-46A-7, 10-46B-6, 10-46E-8, 10-47B-157, 10-52A-6.

Example: A taxpayer using electronic data interchange technology receives electronic invoices from its suppliers. The taxpayer decides to retain the invoice data from completed and verified EDI transactions in its accounts payable system rather than retaining the EDI transactions. Since neither the EDI transaction nor the accounts payable system captures information from the invoice pertaining to product description and vendor name (i.e., they contain only codes for that information), the taxpayer also retains other records, such as its vendor master file and product code description lists and makes them available to the department. In this example, the taxpayer need not retain its EDI transaction for tax purposes.