Form Rv066 - Exemption Certificate - South Dakota Department Of Revenue (Page 2 of 2) in pdf

The Department recommends this certificate be reviewed annually.

Government - The sale of products and services to the following governmental entities is exempt from South Dakota sales and use tax: Indian

Tribes; United States government agencies; State of South Dakota; Public or municipal corporations of the State of South Dakota; Municipal or

volunteer fire or ambulance departments; Public schools, including K-12, universities, and technical institutes that are supported by the State of

South Dakota or public or municipal corporations of South Dakota.

The governments from other states or the District of Columbia are exempt from sales tax if the law in that state provides a similar exemption for

South Dakota governments. Governments providing a similar exemption are Colorado, Indiana, Iowa (motels and hotels are not exempt), Minnesota

(motels and hotels are not exempt), Ohio, and West Virginia. The governments from states without a sales tax are exempt from South Dakota sales

tax. These states are Alaska, Delaware, Montana, New Hampshire, and Oregon.

Documentation Required: Government entities must provide an exemption certificate to the vendor or the vendor must keep documentation to show

the purchase was paid from government funds. Documentation may include a purchase order or a check stub. Government entities are not required

to list an exemption number on the exemption certificate. The department issues some government entities exemption numbers. These agencies will

include their exemption number on the exemption certificate. The exemption number for public schools contains the letters “RS”. The exemption

number for other governments contains the letters “RG”.

Non-profit Hospitals - The sale of products and services to non-profit hospitals is exempt from South Dakota sales and use tax if the following

three criteria are met: An authorized official of the non-profit hospital makes the purchase; Payment is made from non-profit hospital funds; The

non-profit hospital retains title to the property.

Documentation Required: Non-profit hospitals must provide an exemption certificate to the seller to purchase products and services exempt from

sales and use tax.

Relief Agencies - The sale of products and services to relief agencies is exempt from South Dakota sales and use tax. Relief agencies are non-profit

organizations that devote their resources exclusively to the relief of the poor, distressed, or underprivileged, and are recognized as exempt

organizations under § 501(c)(3) of the Internal Revenue Code.

Documentation Required: In order to be exempt from sales and use tax, relief agencies must have a permit from the Department of Revenue. The

permit number contains the letters “RA”. Relief agencies must provide an exemption certificate to purchase products and services exempt from

sales and use tax.

Religious and Private Schools - Churches are NOT exempt from South Dakota sales or use tax. The sale of products and services to religious or

private educational institutions is exempt from South Dakota sales and use tax if the following three criteria are met: An authorized official of the

religious or private educational institution makes the purchase; Payment is made from the religious or private educational institution’s funds; The

religious or private educational institution retains title to the property.

To be exempt from sales and use tax, a private educational institution must: be an institution currently recognized as exempt under section

501(c)(3) of the Internal Revenue Code as in effect on January 1, 1995; Maintain a campus physically located within this state; and be accredited

by the South Dakota Department of Education and Cultural Affairs or the North Central Association of Colleges and Schools.

Documentation Required: Religious or private educational institutions must have a permit from the Department of Revenue to be exempt from

sales or use tax. The permit contains the letters “RS” or “RE”. Religious or private educational institutions must provide an exemption certificate to

purchase products and services exempt from sales and use tax.

Employee Purchases - The exemption from sales and use tax for governments, non-profit hospitals, relief agencies, and religious and private

schools does not extend to the purchase of products or services for the personal use of officials, members, or employees of such institutions.

Employees or representatives of an exempt entity can not buy products or services without paying sales tax if they use a personal check or personal

credit card. This is true even if the exempt entity later reimburses the employee. The exempt entity must pay the vendor from the exempt entity’s

funds. Payment may be made by the exempt entity’s check or credit card.

Agricultural Products - Purchasers of products and services that are exempt when used exclusively by the purchaser for agricultural purposes

must complete an exemption certificate if there is doubt as to the intended usage.

Farm Machinery, attachment units, and irrigation equipment used exclusively for agricultural purposes are subject to the 3% state sales tax. All-

terrain vehicles of three or more wheels used exclusively by the purchaser for agricultural purposes on agricultural land are subject to the 3% state

sales tax. Purchasers of farm machinery, attachment units, and irrigation equipment purchased for agricultural purposes must complete an

exemption certificate if there is doubt as to the intended usage.

Direct Payment Permit - The Direct Payment Permit holder may provide an exemption certificate or provide a copy of their Direct Payment

Permit to the vendor to purchase tangible personal property or services without sales tax. The following items may not be purchased using a Direct

Payment Permit. These transactions are subject to the 4% state sales tax, plus applicable municipal tax at the time of purchase.

• purchases of taxable meals or beverages;

• purchases of taxable lodging or services related thereto;

• purchases of admissions to places of amusement, entertainment or athletic events, or the privilege of use of amusement devices;

• purchases of motor vehicles, or other tangible personal property required to be licensed or titled with a taxing authority, taxed under Title 32; or

• purchases of telecommunications services and utilities (gas, electricity, and heating fuel).

Resale or Re-lease - Lessors, Manufacturers, Wholesaler’s and Retailers that purchase products to resale or release must provide the supplier with

an exemption certificate. The exemption certificate must have the sale’s, wholesaler’s, or manufacturer’s permit numbers listed to be valid. Some

states do not have a sales tax, however, businesses from those states can still purchase for resale, the purchaser must complete the exemption

certificate showing what they are purchasing for resale and that their state does not issue tax permits.

Form Rv066 - Exemption Certificate - South Dakota Department Of Revenue Page 2

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