S.D. Admin. R. 64:01:01:34

Current through Register Vol. 51, page 34, September 9, 2024

Section 64:01:01:34 - Qualification process and requirements for direct payment permit holders

An applicant for a direct payment permit shall meet the following minimum requirements:

(1) Demonstrate the applicant's ability to comply with the department's sales and use tax laws and reporting and payment requirements. The applicant must provide a description of the accounting system used by the applicant and demonstrate that the accounting system reflects the proper amount of tax due;

(2) Establish a business purpose for seeking a direct payment permit and must demonstrate that direct payment benefits tax compliance. For example, the utilization of direct payment authority shall accomplish one or more of the following:

(a) Reduce the administrative work of determining taxability; collecting, verifying, calculating, or remitting the tax;

(b) Provide for accurate compliance in circumstances where determination of taxability of the item is difficult or impractical at the time of purchase;

(c) Provide for more accurate calculation of the tax where new or electronic business processes such as electronic data interchange, evaluated receipts settlement, or procurement cards are utilized; or

(d) Provide for more accurate determination and calculation of tax where significant automation or centralization of purchasing or accounting processes have occurred and applicant must comply with the laws and regulations of multiple state and local jurisdictions;

(3) Has a volume threshold of annual purchases of tangible personal property, products transferred electronically, and services of at least $3 million, which are subject to sales and use taxes;

(4) File and pay or agree to file and pay monthly sales and use tax returns;

(5) File and pay or agree to file and pay by electronic means; and

(6) Agree that its name may be published as a direct payment permit holder on the department's website and in any other related publication, and may be disclosed as a direct payment permit holder in any other manner for tax administration purposes.

The secretary shall review each direct payment permit application. When the department approves the issuance of a direct payment permit, the department shall assign the business a direct payment permit and send the business a direct payment permit. The permit applies only to the business to which it is issued and may not be used by a subsidiary or an affiliate of the business. If a business that has a direct payment permit restructures its business into a new business entity, the new entity must apply for a permit of its own.

S.D. Admin. R. 64:01:01:34

28 SDR 69, effective 11/21/2001; 35 SDR 48, effective 9/8/2008.

General Authority: SDCL 10-46-67.

Law Implemented: SDCL 10-46-67.