S.D. Admin. R. 64:07:01:15
Contractors who have contracts with the United States, the state of South Dakota, and governmental subdivisions have the same sales or use tax liability on their purchases and materials as contractors have with private concerns. They are not entitled to any refund of any South Dakota sales or use tax which they may have paid. If the contractor does not buy in the contractor's own right but is purchasing agent for the government with title passing directly from the seller to the government, the sales or purchases are not subject to sales tax. However, the contractor or subcontractor is liable for use tax if the materials are used or consumed in projects in this state. If a governmental body or sales tax exempt entity furnishes construction materials used by the contractor in a contract, the contractor has a use tax liability even though title never rested in the contractor.
S.D. Admin. R. 64:07:01:15
General Authority: SDCL 10-45-47.1, 10-46-35.1.
Law Implemented: SDCL 10-45-10, 10-46-5.
Declaratory Ruling: The sales tax exemption from receipts of sales of tangible personal property to governmental agencies also applies to the gross receipts from sales of services to governmental entities. Secretary of Revenue Declaratory Ruling No. 79-3.