S.D. Admin. R. 64:06:02:81.01

Current through Register Vol. 50, page 162, June 24, 2024

Section 64:06:02:81.01 - Taxability of nonresident attorneys services used in South Dakota

Any person using services in South Dakota that are provided by a nonresident attorney is liable for use tax on the cost of the services if sales tax is not paid.

16 SDR 76, effective 11/1/1989; 21 SDR 219, effective 7/1/1995; 24 SDR 180, effective 7/1/1998; 31 SDR 214, effective 7/6/2005; 41 SDR173, effective 5/14/2015.

General Authority: SDCL 10-45-47.1(3), 10-46-35.1(3).

Law Implemented: SDCL 10-45-4, 10-45-4.1, 10-45-5.2, 10-45-12.3, 10-45-108, 10-46-2.1, 10-46-18.1.

Examples:

(1) Carl Client hires Linda Lawyer, an Iowa attorney, to represent Carl in a South Dakota lawsuit. Linda does not have a license to practice law in South Dakota but, pursuant to SDCL 16-18-2, is admitted to represent Carl in Carl's lawsuit. Linda must obtain a South Dakota sales tax permit. Linda does not pay sales tax on gross receipts from the services provided by Linda to Carl because Lindas office is in Iowa. Carl will owe use tax because the service is used for a lawsuit in South Dakota.

(2) Ivana Inventor, a South Dakota resident, hires Adam Attorney, a Minnesota attorney, to obtain a patent for Ivana. Adam is not licensed to practice law in South Dakota and is not required to comply with SDCL 16-18-2. Adam's legal services to obtain the patent are used by Ivana in South Dakota and Ivana is liable for use tax.