S.D. Admin. R. 64:06:01:08.03

Current through Register Vol. 50, page 159, June 17, 2024

Section 64:06:01:08.03 - Sale of service for resale

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.

S.D. Admin. R. 64:06:01:08.03

18 SDR 3, effective 7/14/1991; 20 SDR 103, effective 1/10/1994; 21 SDR 219, effective 7/1/1995; 28 SDR 178, effective 7/1/2002; 33 SDR 226, effective 6/27/2007.

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.