S.D. Admin. R. 64:09:01:19
A boat brought into this state by the manufacturer of the boat is not subject to use tax so long as the boat is solely for promotional or demonstrational purposes, title to the boat remains in the name of the manufacturer, and the promotional or demonstrational use of the boat does not extend beyond six months from the time the boat enters the state.
S.D. Admin. R. 64:09:01:19
General Authority: SDCL 10-46-35.1.
Law Implemented: SDCL 10-46-2, 10-46-4.
Examples:
(1) A boat manufacturer delivers a boat to a fishing guide in South Dakota to be used by the guide without charge to promote the manufacturer's product. The guide uses the boat in the guide's business, and, as agreed upon with the manufacturer, extols the boat's virtues to customers. The boat is not used solely for promotional or demonstrational purposes because the guide also uses it to transport clients for a fee. Therefore, the use of the boat is subject to use tax.
(2) A boat manufacturer sponsors a television series on walleye fishing on Lake Oahe. The manufacturer brings in a number of boats which are to be used without charge to those participating in the taping of the series. The boats are used solely to promote the manufacturer's product because they are an implement necessary for the production of the series. The series would not take place without sponsors, and the sponsors would not participate unless their products were showcased. The use is not subject to use tax.