10-45-30. Bad debts--Deduction from amount upon which tax is calculated--Return deduction allowed--Credit or refund.
For purposes of this chapter, a bad debt means the same as the term is defined at 26 U.S.C. §166 as of January1, 2005, and is any portion of the purchase price of a transaction that a seller has reported as taxable and for which the seller or any party related to the seller within the meaning of section 267 or 707 of the Internal Revenue Code (related party), as of January1, 2003, or any disregarded entity for federal income tax purposes that is owned by the seller or a related party, has written off as uncollectible for federal income tax purposes. In computing the amount of tax due, a seller may deduct bad debts from the total amount upon which the tax is calculated for any return. Any deduction taken or refund paid which is attributed to bad debts may not include interest. Bad debts include worthless checks, worthless credit card payments, and uncollectible credit accounts. Bad debts do not include financing charges or interest, sales or use taxes charged on the purchase price, uncollectible amounts on property that remain in the possession of the seller until the full purchase price is paid, expenses incurred in attempting to collect any debt, debts sold, or assigned to unrelated third parties for collection, and repossessed property. No bad debt deduction may be claimed by any person that has purchased accounts receivable for collection unless the person is a successor that has acquired the entire business of the seller that incurred the bad debt, the person is a related party, or the person is a disregarded entity for federal income tax purposes that is owned by the seller or a related party.
A bad debt may be deducted on the return for the period during which the bad debt is written off as uncollectible in the claimant's books and records and is eligible to be deducted for federal income tax purposes. For purposes of this section, a claimant who is not required to file federal income tax returns may deduct a bad debt on a return filed for the period in which the bad debt is written off as uncollectible in the claimant's books and records and would be eligible for a bad debt deduction for federal income tax purposes if the claimant was required to file a federal income tax return. If a deduction is taken for a bad debt and the seller subsequently collects the debt in whole or in part, the tax on the amount so collected shall be paid and reported on the next return due after the collection. A seller may allocate its bad debts among states if the books and records of the seller claiming the bad debt can support such allocation.
If a seller's amount of bad debt exceeds the amount of taxable sales for the period during which the bad debt is written off, the seller may obtain a credit or refund of tax on any amount of bad debt as provided in chapter 10-59. However, a credit or refund under this paragraph may not include interest.
If a seller's filing responsibilities have been assumed by a certified service provider as defined in §10-45C-1, the service provider may claim, on behalf of the seller, any bad debt allowance provided by this section. The service provider shall credit or refund the full amount of any bad debt allowance or refund received to the seller.
Source: SDC 1939, §57.3310 as amended by SL 1967, ch 329, §7; SL 2002, ch 64, §25; SL 2003, ch 65, §1; SL 2005, ch 74, §1.
Structure South Dakota Codified Laws
Chapter 45 - Retail Sales And Service Tax
Section 10-45-1 - Definition of terms.
Section 10-45-1.1 - Gross receipts not to include late charge fees.
Section 10-45-1.2 - Gross receipts not to include refunded sale price of property.
Section 10-45-1.4 - Computation of tax to third decimal place.
Section 10-45-1.5 - Lease or rental defined--Exclusions.
Section 10-45-1.8 - Entire gross receipts from sale of bundled transactions subject to tax.
Section 10-45-1.9 - Bundled transaction defined.
Section 10-45-1.10 - Distinct and identifiable products--Exclusions.
Section 10-45-1.11 - One nonitemized price--Exclusions.
Section 10-45-1.12 - Bundled transaction--Exclusions.
Section 10-45-1.13 - De minimis defined.
Section 10-45-1.14 - Gross receipts defined.
Section 10-45-1.16 - Exclusions from definition of gross receipts.
Section 10-45-1.17 - Telecommunications service defined.
Section 10-45-1.19 - Gross receipts excludes tax imposed by certain chapters and sections.
Section 10-45-2 - Tax on sale of tangible property.
Section 10-45-2.1 - Tax on sales of sectional homes--Sectional homes defined.
Section 10-45-2.3 - Conditional or installment sales--Actual cash receipts subject to tax.
Section 10-45-2.6 - Definition of terms used in § 10-45-2.5.
Section 10-45-2.7 - Retailers processing orders electronically.
Section 10-45-2.8 - Retailers that are part of controlled group.
Section 10-45-4 - Tax on receipts from business services.
Section 10-45-4.1 - Services subject to taxation.
Section 10-45-4.2 - Certain purchases considered for resale purposes.
Section 10-45-5 - Tax on receipts from specific enumerated businesses and services.
Section 10-45-5.3 - Tax on oil and gas field services.
Section 10-45-6 - Tax on utility services.
Section 10-45-6.2 - Tax on certain mobile telecommunications services.
Section 10-45-6.3 - Call center defined--Exclusions.
Section 10-45-7 - Tax on room or parking site rentals to transient guests.
Section 10-45-7.1 - Exemption for lodging house or hotel membership fees.
Section 10-45-8 - Tax on admissions to amusements and athletic contests or events.
Section 10-45-9 - Constitutional and statutory exemptions from taxation.
Section 10-45-9.1 - Exemption of property sold for lease.
Section 10-45-11 - Exemption of fuel sales otherwise taxed.
Section 10-45-11.2 - Exemption of sales of motor vehicles exempt from excise tax.
Section 10-45-12.1 - Services specifically exempt from tax.
Section 10-45-12.2 - Exemption of engineering, architectural, and surveying services.
Section 10-45-12.5 - Exemption of certain sales commissions.
Section 10-45-13 - Exemption of receipts used for civic and nonprofit associations and purposes.
Section 10-45-13.1 - Exemption of membership organizations.
Section 10-45-13.3 - Exemption of lottery tickets.
Section 10-45-13.4 - Exemption of gross receipts from library copying charges.
Section 10-45-14.4 - Packaging and container materials as tax exempt raw material.
Section 10-45-14.5 - Packaging and container materials sold to retailers exempt.
Section 10-45-14.6 - Exemption of hospital meals paid for by public entity.
Section 10-45-14.7 - Exemption of authorized purchases made with food stamps.
Section 10-45-14.8 - Exemption of authorized purchases of food.
Section 10-45-14.9 - Exemption of certain insulin sales.
Section 10-45-14.10 - Exemption of certain drugs.
Section 10-45-14.11 - Exemption of certain durable medical equipment and prosthetic devices.
Section 10-45-14.12 - Exemption of certain medical devices.
Section 10-45-15 - Exemption of seed used for agricultural purposes.
Section 10-45-16 - Exemption of commercial fertilizer used for agricultural purposes.
Section 10-45-18.2 - Exemption of gross receipts from sales of certain animals.
Section 10-45-18.3 - Exemption of gross receipts from sale of feed and bedding for certain animals.
Section 10-45-18.4 - Exemption for sale of certain live nondomestic animals.
Section 10-45-18.5 - Exemption for sale of feed for certain nondomestic animals.
Section 10-45-18.6 - Exemption for sale of swine or cattle semen.
Section 10-45-19 - Exemption of fuel used for agricultural or railroad purposes.
Section 10-45-19.1 - Power charges for irrigation pumps exempt.
Section 10-45-19.3 - Exemption of bulk water for domestic use.
Section 10-45-20 - Exemptions applied to taxable services.
Section 10-45-20.1 - Exemption of payments between members of controlled group--Exception.
Section 10-45-20.3 - Controlled group defined.
Section 10-45-20.5 - Exemption of gross receipts from sale of services rendered--Exception.
Section 10-45-20.6 - Exemption of gross receipts from sale of certain replacement parts.
Section 10-45-21 - Tax additional to other occupation and privilege taxes.
Section 10-45-22 - Addition of tax to price of product or service.
Section 10-45-23 - Schedule for collection of tax from consumer.
Section 10-45-26 - Refusal of permit to delinquent taxpayer--Bond to secure payment of tax.
Section 10-45-27.2 - Collection allowance credit for collecting sales tax.
Section 10-45-29 - Deduction allowed for sales refunds.
Section 10-45-30.1 - Cash basis reporting and payment.
Section 10-45-30.2 - Accrual basis reporting and payment.
Section 10-45-31 - Receipts not issued for taxes remitted.
Section 10-45-35 - Appeals from decisions of secretary.
Section 10-45-37 - Jeopardy assessment of sales tax--Lien and distress warrant--Bond to pay tax.
Section 10-45-47.1 - Promulgation of rules.
Section 10-45-48.1 - Violation of chapter as criminal offense--Classification.
Section 10-45-52 - Tax proceeds credited to general fund.
Section 10-45-58 - Materials used by floor laying as purchases for resale.
Section 10-45-61.1 - Exemption certificate--Timing--Alternative information.
Section 10-45-62 - Exemption of large boats subject to excise tax.
Section 10-45-64 - Exemption of gaming proceeds.
Section 10-45-67 - Exemption of natural gas transportation services by pipeline.
Section 10-45-68 - Exemption for the sale of credit card processing services.
Section 10-45-72 - Inapplicability of tax.
Section 10-45-82 - Gross receipts from charge of interest exempted.
Section 10-45-83 - Pawnbrokers not eligible for exemption.
Section 10-45-84 - Fee or commission not subject to tax.
Section 10-45-85 - Temporary vendor to maintain inventory records--Violation as misdemeanor.
Section 10-45-86 - Temporary vendor to maintain sales receipts--Violation as misdemeanor.
Section 10-45-87 - Temporary vendor to furnish list of suppliers--Violation as misdemeanor.
Section 10-45-88 - Review and audit of temporary vendors.
Section 10-45-89 - Failure to maintain records--Revocation of temporary license.
Section 10-45-90 - Exemption for gross receipts from certain rodeo services.
Section 10-45-91 - Admissions to rodeos and related activities taxable.
Section 10-45-92 - Allowable deductions for auctioneers.
Section 10-45-94 - Exemption for gross receipts from direct mail service.
Section 10-45-94.1 - Direct mail defined.
Section 10-45-95 - Materials purchased by locksmiths are purchases for resale.
Section 10-45-96 - Tax on gross receipts of professional employer organization--Deduction available.
Section 10-45-97 - Professional employer organization defined.
Section 10-45-98 - Temporary help services not subject to §10-45-96.
Section 10-45-99 - Definitions.
Section 10-45-100 - Extension for remitting sales and use tax on manufacturing equipment.
Section 10-45-101 - Requirements for extension.
Section 10-45-102 - Extension applies to full costs and installation fees.
Section 10-45-103 - Application for extension permit--Permit nontransferable.
Section 10-45-104 - Secretary to prescribe form and documentation requirements.
Section 10-45-105 - Fraudulent claim--Tax due constitutes lien in favor of state.
Section 10-45-106 - Right to hearing on denial of extension request.
Section 10-45-107 - Promulgation of rules regarding filing extensions.
Section 10-45-108 - Sourcing of sales and services.
Section 10-45-109 - Registration and tax collection does not create nexus for other taxes.
Section 10-45-110 - Exemption for sale of coins, currency, or bullion.
Section 10-45-111 - Relief from liability for failing to collect tax at new rate--Conditions.
Section 10-45-112 - Exemption for nonprofit corporations created for fire protection.