S.D. Admin. R. 64:06:02:58
All charges for repair services, including maintenance agreements, are subject to sales tax. Repair of personal property or any product transferred electronically is a service in which property is restored to or near its former condition or usefulness. A person engaged in the repair business must have a sales tax license and report tax on the gross receipts.
Items purchased by a repair person which become part of the repaired property may be purchased exempt from sales tax by the repair person. The charges to the customer for the parts and service are taxable. Tools, equipment, and supplies consumed by a repair person are subject to sales tax when purchased. A business is liable for use tax on all items of tangible personal property and any product transferred electronically used by the business even though an item may have been especially fabricated to produce a product for a particular customer, is completely consumed in completing the customer's order, and the cost of the item is included in the charge to the customer.
A person who occasionally does some repair work but does not hold out to the public that the person does repair work is not considered to be in a repair business subject to sales tax.
S.D. Admin. R. 64:06:02:58
General Authority: SDCL 10-45-47.1(3).
Law Implemented: SDCL 10-45-5.