S.D. Admin. R. 64:06:02:03
Advertising services are the business of preparing advertisements for publication in newspapers, magazines, placemats, billboards, or handbills or for broadcast and welcoming services which contact new residents and others to explain business services within the area and leave promotional literature.
Charges for advertising in newspapers or magazines are not taxable. Likewise, charges made by advertising agencies for preparing and placing advertising in advertising media are charges for services and therefore not taxable.
Services purchased by the agency to assist it in completing a project for a current customer are not subject to tax if the service is an integral and inseparable component of the ultimate service to its customer and the agency provides the service provider with an exemption certificate. Examples of services that may be considered for resale if they are an integral and inseparable part of the final product are art work, proofreading, copywriting, handlettering, photo finishing, modeling, photography, production studio rental, photo studio rental, video studio rental, audio studio rental, prop rental, music rights, sound effects, dubbing, typesetting, color separation, keylining, illustration, retouching, air brushing, silk screening, and editing.
Sales tax applies to gross receipts from sales of tangible personal property and any product transferred electronically to persons providing advertising services for use and consumption in preparing advertisements. Tax applies to the following: paper, ink, paint, tools, office supplies, type, and charges by printers for production of pamphlets, booklets, brochures, and other material printed by them.
S.D. Admin. R. 64:06:02:03
General Authority: SDCL 10-45-47.1(3).
Law Implemented: SDCL 10-45-2, 10-45-2.4, 10-45-12.1, 10-45-20.