Justia Tax Law Opinion Summaries

Articles Posted in South Dakota Supreme Court
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After the United States Supreme Court vacated the judgment of the Supreme Court affirming the circuit court’s summary judgment in favor of Defendants, the Supreme Court reversed the circuit court’s grant of summary judgment and remanded the case for proceedings consistent with the United States Supreme Court’s opinion.In 2017, the Supreme Court affirmed the circuit court’s summary judgment in favor of Defendants, holding that the statutory scheme requiring internet sellers with no physical presence in South Dakota to collect and remit sales tax violated the Commerce Clause. The United States Supreme Court vacated the judgment and remanded the case. The State subsequently filed a motion requesting the Supreme Court to remand the matter for further proceedings. Defendants filed no response. Accordingly, the Supreme Court dispositively remanded this case for further proceedings not inconsistent with the United States Supreme Court’s opinion. View "State v. Wayfair Inc." on Justia Law

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The Supreme Court affirmed the circuit court’s judgment affirming a certificate of assessment issued by the Department of Revenue requiring Valley Power Systems, Inc. to pay alternate contractor’s excise tax, use tax, interest, and a penalty.Valley Power contracted with Black Hills Power, Inc. (BHP) to install new exhaust manifolds on five mobile power units that were used by a utility company to provide supplemental power at one of its power plants, but Valley Power did not pay any tax with respect to the transaction. Instead BHP paid use tax on the transaction. After an audit of both companies, the Department refunded BHP’s use tax and issued a certificate of assessment requiring Valley Power to pay $54,404. An administrative hearing examiner and the circuit court affirmed the assessment. The Supreme Court affirmed, holding that the Department did not err in concluding that Valley Power was required to pay excise and use tax. View "Valley Power Systems v. S.D. Department of Revenue" on Justia Law

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The Supreme Court affirmed the judgment of the circuit court granting summary judgment for certain Internet sellers (Sellers) and enjoining the State from enforcing 2016 legislation extending the obligation to collect and remit sales tax to sellers with no physical presence in the state. Pursuant to the legislation, the State brought this declaratory judgment action seeking a declaration that Sellers, who had no physical presence in the state, must comply with the requirements of the 2016 legislation. The circuit court enjoined the State from enforcing the obligation to collect and remit sales tax against Sellers, observing its obligation to adhere to Supreme Court precedent prohibiting the imposition of an obligation to collect and remit sales tax on sellers with no physical presence in the State. The Supreme Court affirmed, holding that the circuit court correctly applied the law when it granted Sellers’ motion for summary judgment. View "State v. Wayfair Inc." on Justia Law

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The Department of Revenue subjected several corporations owned by North American Truck & Trailer, Inc. (collectively, Taxpayers) to a sales-and-use-tax audit, which uncovered errors regarding Taxpayers’ reporting of use tax. Thereafter, the Department assessed Taxpayers for unpaid use taxes. Taxpayers paid the assessment under protest and requested an administrative hearing. At the hearing, Taxpayers argued that the shop supplies assessed were exempt from use tax and offered exhibits in support of their position. The hearing examiner declined to consider a sales invoice offered by Taxpayers demonstrating a typical transaction that involved the cost of supplies because Taxpayers submitted it more than sixty days after the audit began, in violation of S.D. Codified Laws 10-59-7. The Supreme Court affirmed, holding that the hearing examiner did not err when it (1) affirmed the Department’s refusal to consider the sales invoice; and (2) affirmed the Department’s certificate of assessment of use tax due and owing on transactions where shop supplies, purchased without payment of sales tax, were used and consumed. View "Black Hills Truck & Trailer, Inc." on Justia Law

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USA Tire Management Systems Inc. entered into a contract with Great Western Bank to “take title to, remove, and transport” tires and casings from a foreclosed property that a bank was attempting to sell. After an audit, the South Dakota Department of Revenue issued an assessment on the gross receipts USA Tire received from Great Western under their contract. USA Tire contested the assessment. The circuit court affirmed the assessment. USA Tire appealed, arguing that it was entitled to a trucking services tax exemption. The Supreme Court affirmed, holding that USA Tire did not meet its burden of proving that its services were exempt trucking services under S.D. Codified Laws 10-45-12.1. View "In re Sales Tax Liability of USA Tire Mgmt. Sys., Inc." on Justia Law

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In 2012, the South Dakota Department of Revenue (Department) commenced an audit of Taxpayer’s excise tax and sales tax licenses for tax period 2009 through 2012. At issue in this case was whether Taxpayer’s construction management at-risk services provided to public and non-profit entities were subject to a contractor’s excise tax under S.D. Codified Laws 10-46A-1. Taxpayer did not remit excise tax on the gross receipts it received from its construction management at-risk services provided to public and non-profit entities. As a result of the audit, the Department issued Taxpayer a certificate of assessment for $43,020, which included excise tax and interest. The circuit court reversed the Department’s certificate of assessment, ruling that Taxpayer’s services were not subject to a contractor’s excise tax under section 10-46A-1. The Supreme Court reversed, holding that Taxpayer’s act of entering into a contract with a public entity to guarantee a satisfactorily completed public improvement project by a specific date for a specific cost was subject to excise tax under section 10-46A-1. View "Puetz Corp. v. S.D. Dep’t of Revenue" on Justia Law

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The South Dakota Department of Revenue and Regulation (Department) issued Appellant a jeopardy assessment alleging unpaid sales tax. On appeal, a hearing examiner found Appellant liable for a jeopardy assessment, and the Secretary of Revenue adopted the decision. The circuit court dismissed Appellant's appeal, holding that Appellant's failure to pay the amounts affirmed by the Secretary or to file a bond before commencing its appeal resulted in the failure to preserve jurisdiction in the court. The Supreme Court affirmed, holding (1) Appellant's failure to post its bond within the statutory period was fatal to its appeal; (2) Appellant failed to substantially comply with the relevant statute; and (3) the time for Appellant to post its bond could not be equitably tolled. View "AEG Processing Ctr. No. 58, Inc. v. S.D. Dep't of Revenue & Regulation" on Justia Law

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Plaintiff was the owner of fourteen "recreational park trailers" that were used as cabins for lodging in a campground Plaintiff operated. Pennington County assessed the cabins as real property for ad valorem taxation purposes. The County Board of Equalization affirmed the assessment. On appeal, the circuit court reversed and granted summary judgment to Plaintiff, concluding that the cabins were not taxable under S.D. Codified Laws 10-4-2. The County appealed. The Supreme Court reversed, holding that, when considered together, the facts of this case established that Plaintiff's cabins were "improvements to land" within the meaning of section 10-4-2(2). View "Rushmore Shadows, LLC v. Pennington County Bd. of Equalization" on Justia Law

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Magellan Pipeline Company, LP appealed a sales tax assessment levied by the state Department of Revenue and Regulation on its additive injection and equipment calibration services. The Hearing Examiner, Department Secretary and trial court all found Magellan's services were non-exempt from tax. Upon review, the Supreme Court concluded that under the plain language of the applicable statute, Magellan's services were exempt from sales tax. View "Magellan Pipeline Co v. Dept. of Revenue & Regulation" on Justia Law

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Appellees John Apland and others (collectively, Apland) and the Butte County Director of Equalization (Director) were involved in a dispute over the method Director used to calculate the value of Apland's rangeland property for tax purposes. In Apland I, the Supreme Court held that Director failed to comply with the Constitutional requirements of equality and uniformity and remanded with direction to Director to re-determine the property values after giving appropriate consideration and value to appurtenant and nontransferable water rights. On remand, the trial court entered a judgment in favor of Apland, concluding that Director failed to comply with the directives in Apland I. The Supreme Court reversed and remanded, holding that Director properly executed the directives of Apland I but that the record did not allow the Court to determine whether Director's method of valuation of Apland's property resulted in an equal and uniform assessment. View "Apland v. Bd. of Equalization for Butte County" on Justia Law