South Dakota Administrative Rules
Title 64 - REVENUE
Article 64:06 - Sales tax
Chapter 64:06:01 - Administration of program
Section 64:06:01:08.03 - Sale of service for resale
Current through Register Vol. 50, page 114, March 25, 2024
Services which are purchased by a service provider and delivered to a current customer in conjunction with the services contracted to be provided to the customer are considered to be for resale. Receipts from the sale of a service for resale by the purchaser are not subject to sales tax if the purchaser furnishes an exemption certificate.
In order for the transaction to be a sale for resale, the following conditions must be present:
(1) The service is purchased for or on behalf of a current customer;
(2) The purchaser of the service does not use the service in any manner; and
(3) The service is delivered or resold to the customer without any alteration or change.
General Authority: SDCL 10-45-47.1(3), 10-46-35.1(3).
Law Implemented: SDCL 10-45-1(10), 10-45-4, 10-45-4.1, 10-45-20, 10-46-2.1
Example:
John Customer purchases a subscription to a movie channel from Fantastic Cable Company. Fantastic purchases the right to view the movie channel from Hollywood Movies, a cable movie channel subscription service. The services provided by Hollywood Movies are purchased for resale as Fantastic does not use the service in any way.
