hospitality industry. 4% states sales taxup to 2% municipal sales tax1% municipal gross receipts...

HOSPITALITY INDUSTRY

4% States Sales Tax

Up to 2% Municipal Sales Tax

1% Municipal Gross Receipts Tax

1.5% Tourism Tax

TAXES THAT MAY APPLY TO RECEIPTS

March 15, 2012

See the Municipal Tax Information Bulletin for municipal tax rates.

MUNICIPAL GROSS RECEIPTS TAX

Municipalities may elect to apply a 1% Municipal Gross Receipts Tax to any one or combination of the following:

Lodging

Alcohol

Eating Establishments – Prepared Food

Admissions to Places of Amusement

March 15, 2012


Municipalities may elect to apply a 1% Municipal Gross Receipts Tax to any one or combination of the following:

MUNICIPAL TAX INFORMATION BULLETIN

March 15, 2012

Municipal Sales Tax Gross Receipts Tax – In Addition to Municipal Sales Tax

CityJan ‘11

RateGeneral

Code

Jan ‘11 Gross

Receipts Tax

Tax Code

Lodging

Eating Establishments Alcohol Admissions

Aberdeen 2.00% 001-2 1.00% 001-1 X X X X

Blunt 1.00% 034-2 1.00% 034-1 X

Mitchell 2.00% 243-2 1.00% 242-1 X X X

Presho 2.00% 291-2

July 2011


TOURISM TAX

Lodging – Hotels, Lodging Places, and Campgrounds

Visitor Attractions – includes any business conducted on the site of a visitor attraction.Water Slides, Wave Pools, Amusement Parks, Human Mazes, Miniature Golf Courses

Visitor Intensive Businesses – If 50% or more of total annual sales of entire business are from sale of products (excluding services) during June through September, then tourism tax applies on all receipts during June through September. Gift shops, T-shirt Shop, Souvenir Shop, Jewelry Stores

March 15, 2012

The above is not a complete listing. See the Tourism Tax Facts for additional information.

FRANCHISERoyalty fees paid strictly for the right to use the franchisor’s name are not subject to sales or use tax.

A franchisor may provide products and services subject to sales tax.

Examples: training, accounting, reservation fees, marketing contribu tions, gift certificates, quality assurance inspections, consulting, advertising, promotions, and software, GDS fees, Frequent Flyer Miles, Internet, virtual tours, guest satisfaction surveys, 800 Express, calls transferred.

If the fees for taxable items are itemized, sales or use tax only applies to the taxable charges.

When taxable sales are included within the royalty fee, and not separately stated, the entire royalty payment is subject to state sales tax, plus applicable municipal sales tax.

March 15, 2012

The above list is not all inclusive. Additional information is available in the Franchise Tax Facts

FRANCHISE – EXEMPT SERVICES

March 15, 2012

The following items are exempt from sales or use tax when sold by a franchisor to a franchisee:

• Advertising that is prepared and placed in the media (TV, Radio)

• Items that are sold in the regular course of the franchisee’s business

• Royalty fees if no services or property are included

• Travel agency fees that are passed directly to the franchisee with no markup.

Examples:

Bed and Breakfasts, Cabins, Condominiums, Hunting Lodges, Guest Ranches, Hostels, Hotels, Motels, Resorts, Tourist Homes, Timeshare

Rentals, Vacation Home Rentals, Campgrounds, Cabins, Camping Resorts, Organizational Camps, Park Units, Recreational Vehicle Parks, Trailer

Parks, Youth Camps

LODGING AND CAMPGROUNDSIF RENTED FOR 28 CONSECUTIVE DAYS OR LESS

March 15, 2012

LODGING AND CAMPGROUNDS

Transient Guest:

• Any person that resides in a lodging establishment or campground less than 28 consecutive days.

Rental of lodging or campgrounds to a person for 28 or more consecutive days is exempt from sales tax.

Casual or occasional:

• The rental of lodging or campsites for 10 or less days in a calendar year is not subject to sales tax.

Any lodging or campsite that has a sales tax license is not a casual or occasional business.

March 15, 2012

See the Hotel, Motel, and Campground Tax Facts for additional information.

LODGING - WHAT TAX APPLIES?

Description4% State Sales Tax


1% Municipal Gross Receipts

Tax 1.5%

Tourism Tax

Lodging or campground rentals to transients guests x x x x

Lodging or campground rentals to same company or guest for 28 or more consecutive days Exempt Exempt Exempt Exempt

Cancellation Fees x x x x

No Show Fees x x x xDeposit or guarantee fee - Tax is due when customer stays or deposit is forfeited. Tax is refunded if deposit is refunded. x x x x

Cribs, Cots, Roll-away beds x x x x

Occupational Tax SDCL 9-55-7 BID (Not paid to State) Exempt Exempt -- --

Resort Fees x x x xPet Fees or Deposit -Tax is refunded if deposit is refunded. x x x x

Meeting room rental x x -- --

Parking, including Valet Parking x x -- --

Damage charges x x -- --

Free Rooms - provided at no charge to guest:

• Motel receives no compensation from guest or any other entity Exempt Exempt Exempt Exempt

• Motel receives compensation for the room from a travel club or franchisor x x x x

• Motel receives a service or product in exchange for the room x x x x

Municipal taxes apply when the sale is in a city that imposes the tax.March 15, 2012


Up to 2% Municipal

Sales Tax 1% Municipal

Gross Receipts Tax 1.5%

Tourism Tax

In-room safe - optional charges x x -- --

In-room safe - mandatory charge x x x x

Refrigerators - optional charges x x -- --

Pay per view movies and video games x x -- --

Rentals of DVD players, movies or video games x x -- --

TAX ON CHARGES FOR IN ROOM EQUIPMENT

March 15, 2012

Municipal taxes apply when the sale is in a city that imposes the tax.




Tax1.5%

Tourism Tax

Internet access fees x x -- --

Printing charges x x -- --

Copy or fax charges x x -- --

Telephone charge by motel to guest (The telephone company’s charge to the motel is subject to sales tax.) Exempt Exempt Exempt Exempt

Laundry and Dry Cleaning:

• Coin operated laundry -Subject to an annual license fee paid to the Special Tax Division of Department of Revenue. Exempt Exempt Exempt Exempt

• Laundry service performed by hotel for guests x x -- --

• Laundry service provided by independently owned laundry (The laundry company owes state and municipal sales tax on their charge.) Exempt Exempt Exempt Exempt

• Service fees charged in addition to the fee charged by the independently owned laundry x x -- --

March 15, 2012


MISCELLANEOUS SERVICES




Tax1.5%

Tourism Tax

Transportation - Shuttle, taxi, or limousine service • Originates and terminates within the same city x x -- --

• Originates and terminates in SD but not in the same city x -- -- --

• Originates or terminates outside SD Exempt Exempt Exempt Exempt

Tours - Tour operator owes the tax on receipts from sale of tour

• Tours within the same city, no destinations outside that city x x 1 x

• Tours within SD, no destinations outside SD, but not all within the same city x -- -- x

• Tours to or from destinations outside SD Exempt Exempt Exempt Exempt

• Rooms sold to a tour operator (The lodging establishment owes the tax.) x x x x

• Commission the lodging establishment receives from the sale of a tour Exempt Exempt Exempt Exempt

March 15, 2012

Municipal taxes apply when the sale is in a city that imposes the tax. 1 Tours subject to municipal sales tax, are subject to municipal gross receipts tax IF the tour charge includes tickets or admissions to places of amusement, lodging, or restaurant meals.

TRANSPORTATION AND TOURS



1% Municipal Gross Receipts Tax

1.5% Tourism Tax

Mini-bar - food or drinks sold in guest room x x

Room service x x x

All food or drinks sold by restaurant or bar x x x

Food and drinks sold through vending machines:

• Dispensed into cups, glasses or bowls x x x

• Prepackaged, bottled or canned food or drinks x x

SALE OF FOOD AND DRINKS

Chart is available in the Hotels, Motels and Campgrounds Tax Facts.

March 15, 2012


Food and drink provided to the guest at no charge is subject to state and municipal use tax. Municipal gross receipts does not apply to food or drinks given away.

Resort Fee – A resort or facility may charge an additional fee use of their facility such as waterslides, golf courses, tennis courts, swimming pools etc. Resort fees are included in the receipts subject to the state and municipal sales tax, municipal gross receipts tax, and tourism tax.

OTHER TAXES OR FEES

March 15, 2012

Municipal Occupational Tax on Lodging - may be imposed by a business improvement district per SDCL 9-55-7. This may be called a lodging fee, BID tax, pillow tax, or occupancy tax. It is not included in the receipts subject to sales tax.

Sioux Falls Lodging Tax – is in addition to the state and municipal sales tax, municipal gross receipts tax, and tourism taxes. It is not included in the receipts subject to sales tax.

GIFT SHOPS – TOURISM TAXIf a gift shop is distinct from the business in which it is located and 50% or more of the gift shop’s total receipts are during June through September, the gift shop will owe tourism tax on their receipts during June through September. A gift shop is distinct from the business in which it is located if: 1. The gift shop is physically separate from the other business, such as a motel . This may

include a separate cash register or walls separating the gift shop from the remainder of the business. In some hotels the gift shop is down the hall from the front desk and appears to the customer to be as separate as the hotel’s restaurant; or

2. The gift shop is operated by a person other than the owner of the business in which it is located.

Items sold at the registration desk are not subject to tourism tax.

Tourism tax is in addition to state, municipal and municipal gross receipts taxes.

March 15, 2012

REWARDS PROGRAMS

March 15, 2012

Lodging establishments may participate in reward programs. These programs provide a variety of rewards to the customer after a certain number of stays or points are accumulated.

Rewards may be a free night, retailer gift certificates, airline tickets or other merchandise.

The lodging establishment pays a fee which is put into a fund to reimburse the hotel or airline for rewards used for free lodging or tickets.

What is subject to sales or use tax?

1. Amounts the lodging establishment contributes to the rewards program are subject to state and applicable municipal sales or use tax, based on the motel location.

2. Amounts the lodging establishment receives from the rewards program for free nights guests have redeemed are subject to state, municipal, municipal gross receipts, and tourism tax.

RESERVATION SYSTEMS

1. Fees to use a reservation system, such as the reservation systems provided by a franchisor for their franchisees, are subject to sales or use tax.

2. Charges by global distribution systems are subject to sales or use tax. This type of service provides a single point of access for reserving airline seats, hotel rooms, rental cars, etc. These systems are used by travel agencies and reservation services to provide their customers with up to date information on availability and rates. The actual reservations are made through the travel agent or reservation service. These fees may be charged to the franchisor and passed on to the franchisee. Any charges passed on to the franchisee are subject to sales or use tax.

March 15, 2012

RESERVATION AGENCIESFees received by companies providing reservation services to various lodging and campground establishments that are based on the sale of a room or camping site are not subject to sales tax.

When a business is paid a fee to take reservations, but the fee is not based on the sale of a room or camping site, the fee is subject to sales tax. (For instance, a motel pays a flat fee per year to the reservation agency)

A lodging establishment owes tax on the total charge to the customer for the room without deduction for amounts paid to or retained by the reservation service.

A. Rooms at a South Dakota motel are booked through J’s reservation service. J’s collects the room charge of $100 plus tax of $8.50. J’s sends $98.50 to the motel and retains $10 for their service.

• The motel owes tax on the total charge of $100. • J’s reservation service does not owe sales tax on the $10 they retain.

B. Another motel uses a reservation service; however, the customer pays the motel directly. The motel collects $100 plus tax of $8.50. The motel sends a commission to the reservation service of $10.

• The motel owes tax on the room charge of $100. • The reservation service does not owe sales tax on the $10 commission paid by the motel.

March 15, 2012

PURCHASES FOR RESALE

Items purchased to sell to customers can be purchased for resale.

Items which are sold to customers may included:

• Mini-bar food or drinks

• Gift shop items

• Products sold through vending machines

Items that are provided to customers for their use are subject to tax.

Ash trays Ice buckets Towels

Soap Shampoo Robes

March 15, 2012

HUNTING LODGES

• A hunting lodge is selling a service, not tangible personal property, therefore there are items that cannot be purchase for resale.

• The following are examples of items that are taxable when purchased if provided or included in the charge for the lodging or hunting package:

• Food and Drinks • Souvenirs • Ammunition

Example: A pheasant lodge, located outside city limits, is providing a hunting package of 3 days of guided hunting, lodging, meals, drinks and snacks. One fee covers the entire package. No items are sold separately from the package.

The lodge owes sales or use tax when purchasing the food, drink, etc.

The lodge also owes state tax and tourism tax on the entire package.

More information is available in our Hunting & Fishing Service Tax Fact

March 15, 2012

USE TAXWhen sales tax is not properly charged, use tax applies.

Retailer pays Sales Tax - Purchaser pays Use Tax.

•Use tax is the same rate as the state and municipal sales tax.

•Applies to the purchase price-including freight or delivery charges.

Example: You purchase blankets online for $500 + $50 shipping. Use tax is due on $550.

• If a product or service is exempt from sales tax, it is also exempt from use tax.The majority of audit assessments are for use tax.

Review all purchase invoices for items that are subject to sales or use tax.

Pay use tax on items taken from inventory to use or give away.

March 15, 2012

Supplies, materials, equipment or services used by the facility are subject to sales tax when purchased. If the supplier does not charge sales tax, use tax is due at the same tax rate as sales tax.

The state use tax rate is 4%, plus applicable municipal use tax, and is payable to the Department of Revenue in the filing period in which the lodging establishment or campground receives the supplies or services.

• accounting services• beds, bedding • coffee pots, cups • coffee, tea, mints, water• cleaning supplies and

equipment • computer or internet

services• consulting services• drapes • electronic lock systems• furniture • ice bucket

• ice machine• Key cards and holders• laundry bags • laundry supplies and

equipment• office supplies• pens, stationery, note

pads • pool supplies• soaps, shampoos• shower caps• toilet paper• towels • TVs

WHAT IS USE TAX DUE ON?

Examples of products and services subject to use tax:

March 15, 2012

COMPLIMENTARY FOOD AND DRINKS

All complimentary food or drink is subject to state and municipal sales or use tax.

Disposable containers provided for use with complimentary food or drinks are subject to state and municipal sales or use tax.

Examples: paper plates, cups, glasses, bowls.

March 15, 2012

EVENTS – MEETINGS What tax applies to the receipts?

Rental of Room – subject to state and municipal sales tax

Equipment rental – optional – subject to state and municipal sales tax.

Food – optional – subject to state and municipal sales tax and municipal gross receipts tax.

Can the facility purchase products or services for resale?• Items the facility provides to customers are subject to sales or use tax at the time of

purchase.• Items purchased to rent or sale to a specific customer may be purchased for resale.

These charges are itemized on customers invoice.

If any item purchased to rent or sale to a customer is used by the facility, use tax is due on the cost of that item. Items that have had sales or use tax paid on them, that are later rented will be subject to sales tax on the rental charge also.

Examples of Equipment: Projectors, Microphones, Computers, TVs, Tables, Chairs, Linens

March 15, 2012

EXAMPLE

March 15, 2012

A facility has meeting rooms. Each room is provided with tables, chairs, table linens and free wireless Internet. Coffee is provided with the room.

Available for an additional charge are: PA system, Microphone jacks, VCR, DVD, front and rear screen projectors, spotlights, printing, and catering.

The facility has an inventory of equipment available for lease to customers – this equipment is not used by the facility.

• The motel owes state and municipal sales tax on the charges for the room and the optional equipment or services sold.

• The motel owes state and municipal sales or use tax on their purchase of the tables, chairs, table linens, and internet service. Use tax is also due on the cost of the coffee, the coffee pots, cups, sugars, and creams provided with the free coffee service.

IS THE CUSTOMER EXEMPT FROM SALES TAX?

The sale of products and services to the following 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 Da kota• Municipal or volunteer fire or ambulance departments• Public schools, including K-12, universities, and technical institutes supported by the

State of South Dakota or public or municipal corporations of South Dakota.• Non-profit hospitals • Religious or private schools approved by the Department• Relief agencies approved by the Department (List is on Department’s website) • Foreign Diplomats that have a tax exempt card that indicates they are exempt from

tax on their purchase.Documentation must show payment was made directly by the exempt entity.

More information is available in the Exempt Entities Tax fact

March 15, 2012

IS THE CUSTOMER EXEMPT FROM SALES TAX?

Purchases made by individuals working for an exempt entity that pay with their own funds or

credit card are not exempt from sales tax, even if they will be reimbursed by their employer.

• Example: state employees on state business paying with their own funds

March 15, 2012

Governments from other states or the District of Columbia, including public schools and state universities, are exempt from sales tax if the law in that state provides a similar exemption for South Dakota governments.

Purchases of lodging made directly by the govern ments from the following states are exempt from South Dakota sales tax:

• Alaska• Colorado• Delaware• Indiana• Montana• New Hampshire• North Dakota• Ohio• Oregon• West Virginia

OTHER STATES’ GOVERNMENTS

March 15, 2012

DOCUMENTATION FROM GOVERNMENT

The seller may document an exempt government sale by:1. Obtaining an exemption certificate; or2. Keeping documentation to show the purchase was paid from government funds.

Documentation may include a purchase order or a check stub. Government entities do not need to provide an exemption number on the exemption certificate.

Exemption certificates are only valid for purchases made by and paid directly by the exempt entity the exemption certificate is for.

When a purchase is made with a government credit card, an imprint or copy of the credit card must be kept as documentation.

March 15, 2012

FEDERAL GOVERNMENT TRAVEL CARDSFederal Government Travel Cards have a blue border and feature a U.S. flag and a large jet. The card is imprinted with: “For Official Government Travel Only.” These cards can be used for meals, lodging, rental cars, and similar travel-related venues.

Travel cards start with 4486, 4614, 5568, or 5565. Purchases made with Travel cards that have a sixth digit of 1,2,3, or 4 are subject to sales tax.

Purchases made with Travel cards that have a sixth digit of 0, 6, 7, 8, or 9 are exempt from sales tax. The government credit card number must be kept as documentation if the purchase is exempt.

Purchases made with Federal Government GSA SmartPay® 2 Fleet Cards, Purchase Cards, and Department of Interior Cards are exempt from sales tax.

March 15, 2012

DIPLOMATIC EXEMPTION CARD

March 15, 2012

Deer: Cards are intended to be used solely in connection with personal purchases. Cardholder has limited exemptions from sales, occupancy, restaurant/meal, and other similarly imposed taxes. (Example, cards may read “EXEMPT FROM TAXES IMPOSED ON

PURCHASES OF HOTEL STAYS, RESTAURANT MEALS, AND RENTAL CARS .”)

Eagle: Cards are intended to be used solely in connection with personal purchases. Cardholder is exempt from sales, occupancy, restaurant/meal, and other similarly imposed taxes without restriction.

Buffalo: Cards are intended to be used solely in connection with official purchases. Cardholder/mission limited exemptions from sales, occupancy, restaurant/meal, and other similarly imposed taxes. (Example, such cards may read “EXEMPT FROM TAXES IMPOSED

ON PURCHASES OVER $300; NOT VALID AT HOTELS.”)

Owl: Cards are intended to be used solely in connection with official purchases. Cardholder/mission is exempt from sales, occupancy, restaurant/meal, and other similarly imposed taxes without restriction.

Exemptions are listed on front of card.

The validity of a Diplomatic Tax Exemption Card can be verified on-line at https://ofmapps.state.gov/tecv/ or by contacting OFM by telephone at (202) 895-3500, x2.Please visit www.state.gov/ofm/tax/ for additional information.

March 15, 2012

Restaurants, bars, casinos, hotels, boarding houses, drugstores, drive-in restaurants, lunch counters, snack bars, cafeterias, caterers,

sandwich shops, cafes, and any similar place of business that sells prepared food and beverages.

More information is available in the Bar/Restaurant Tax Fact

RESTAURANTS AND BARS

March 15, 2012

WHAT IS SUBJECT TO SALES TAX?

Product

4% State

Sales Tax


1% Municipal Gross

Receipts Tax

1.5% Tourism

Tax

Sale of all food products X X X --

Sale of all beverages X X X --

Sale of all alcohol X X X --

Tips:

• Mandatory – added to the bill X X X --

• Discretionary – voluntary -- -- -- --

Cover Charge to enter a bar X X X --

March 15, 2012

Containers provided free of charge to the customer that are used to hold a food or beverage sold can be purchased for resale and are not subject to state and municipal sales or use tax.

Examples may include:• Condiment containers• Disposable cups, glasses, hot cup sleeves, lids• Disposable food trays• Doggie bags• Paper or plastic bags• Pizza boxes and liners• Styrofoam containers

CONTAINERS

March 15, 2012

Does it hold the product sold? Is it provided free to the customer?

Containers the retailer reuses are subject to state and municipal sales or use tax when purchased.

Examples may include:• Pitcher• Plates, glasses, cups• Plastic trays or baskets• Serving trays

CONTAINERS

March 15, 2012

Items that are not containers are subject to state and municipal sales or use tax when purchased.

Examples may include:• Disposable eating utensils• Disposable plates provided with pizza in a box• Disposable towelettes• Napkins• Placemats• Stir Sticks• Straws• Sword picks• Table clothes or covers• Tripods used in pizza boxes to hold lid up• Utensils

ITEMS THAT ARE NOT CONTAINERS

March 15, 2012

DISCOUNTS - PROMOTIONSCoupons:

Retailer receives NO reimbursement – Not taxable

Retailer receives reimbursement from a third party – Taxable

Complimentary meals – State use tax and municipal use tax

Complimentary beverages – State use tax and municipal use tax

Meal Replacements: if an error is made in preparing food or drink and an the item is replaced, but still charged for, the amount charged is subject to tax, no use tax is due on the returned item.

Buy one get one free – this is a condition of sale – you must buy one to get one.

• State sales tax, municipal tax, municipal gross receipts tax applies to the charge. No additional tax is due on the one given free with the required purchase.

March 15, 2012

CATERING

Subject to state sales tax, municipal tax, municipal gross receipts tax based on the location of the catered event.

Caterer can purchase the following items for resale:FoodDisposable containers: plates, glasses, cups, bowls

Taxable purchases:Napkins, utensils, reusable plates, glasses,cups, bowls, serving platters, all tools and equipment used to provide service.

March 15, 2012

ENTERTAINMENT

Entertainment services - subject to state and municipal sales or use tax.

Cover charges to enter a bar when they have entertainment - subject to state sales tax, municipal sales tax, municipal gross receipts tax. (no tourism tax)

If a bar has a cover charge, the entertainer’s service may be purchased for resale.

Because many entertainers (bands) are not licensed, it is the retailers’ responsibility to remit state and municipal use tax on the amounts paidthe entertainer if they are not charged sales tax.

March 15, 2012

RESALE PURCHASESItems to be sold to customers may be purchased by the restaurant or bar for resale.

Examples:• Food – includes condiments such as ketchup, mustard, salt, pepper, olive oil• Beverages• Clothing items – T-shirts, jackets, caps

Food provided to customers at no charge is subject to state and municipal sales or use tax when purchased or when removed from a tax unpaid inventory.

Examples:• Popcorn• Hors D’oeuvres• Free Drinks

March 15, 2012

Municipal gross receipts tax does not apply to food or drinks provided

free to the customer.

USE TAXABLE ITEMS

• Air Filter Systems• Amusement Machines• Appliances – ovens, microwaves, coolers,

glass washers, sinks• Banners• Bookkeeping Fees• Cash registers• Cleaning Equipment and Supplies• Cleaning Service • Coin Counters• Computer Systems and Software• Coolers

• Entertainment: Bands, Magicians

• Furniture: Tables, Chairs, Barstools• Gaming Supplies: Cards, Dice and Cups,

Poker Chips• Internet Access• Keg Taps• Kitchen Items: pots, pans, cooking utensils• Magazine or Newspaper Subscriptions• Menus• Office Supplies• Signs• Uniforms

Examples of products and services subject to use tax:

March 15, 2012

List is not all inclusive.

VENDING MACHINES

1Prepared food includes food served in containers such as glasses, cups, bowls. Examples: hot soup, coffee, hot chocolate

2Other Items includes prepackaged food (pop, candy bars, chips), other items such as razors, combs, toothbrush, shampoo.

Product 4% State Sales Tax



Tax

1.5% Tourism

TaxVending Machines, Purchase of X X -- --

Vending Machine Repairs X X -- --

Sales from Vending Machines:

• Prepared Foods1 X X X --

• Other Items2 X X -- --

Commissions for placement of vending machine at business

Exempt Exempt Exempt Exempt

March 15, 2012

AMUSEMENT MACHINES

1 A $12 decal is purchased annually in lieu of the municipal sales tax. Decal is purchased from the Department of Revenue’s Special Tax Division.




Tax

1.5% Tourism

TaxAmusement Machines1 X Exempt -- --

Amusement Machine Repairs1 X Exempt -- --

Amusement Machine Receipts1 X Exempt -- --

Toys and other products that may be won in an amusement machine are subject to use tax when purchased.

X X -- --

Commissions for placement of vending machine at business

Exempt Exempt Exempt Exempt

March 15, 2012

VIDEO LOTTERY

Amusement machine decal is not required for video lottery machines.




Tax

1.5% Tourism

TaxVideo Lottery Machines X Exempt -- --

Video Lottery Machine Repairs X Exempt -- --

Receipts Exempt Exempt Exempt Exempt

March 15, 2012

COIN OPERATED WASHER AND DRYERS

Washer and Dryer permits must be obtained from the Department’s Special Tax Division.




Tax

1.5% Tourism

TaxMachines X X -- --

Machine receipts Exempt Exempt -- --

Sale of soaps and products to use in machines

X X -- --

March 15, 2012

GROSS RECEIPTS Gross receipts include the total amount received for a product or service excluding sales tax that is itemized on the invoice.

March 15, 2012

Example of invoice: Hamburger $ 10.00Sales tax 7% $ .70Total $ 10.70

Gross receipts are $10.00. Total State, municipal sales, and municipal gross receipts tax due is $ .70

Example of invoice: Drink $10.00

Determine taxable receipts by dividing $10.00 by 1.07 (state, municipal sales and municipal gross receipts tax total rate is 7%)

$10.00 ÷ 1.07 = $9.35

Gross receipts are $9.35. Total State, municipal sales, and municipal gross receipts tax due is $ .65.

Bars are allowed to back tax out of their gross receipts.

Tax may also be backed out of Amusement and Vending machine receipts.

EMPLOYEE MEALS

March 15, 2012

• Meals furnished at no cost to an employee are subject to state and municipal use tax on the restaurant’s cost of items provided.

• Meals sold to employees are subject to state, municipal, and municipal gross receipts tax on the amount the meal is sold for.

GIFT CERTIFICATES

March 15, 2012

The sale of a gift certificate is not subject to sales tax.

Sales tax applies when the gift certificate is redeemed for taxable products or services.

Tourism Tax applies to:

Hotels, Lodging, and Campgrounds

Motor Vehicle Rentals (cars, pickups, and vans)

Recreational Equipment Rentals

Recreational Services

Spectator Events

Visitor Attractions

Visitor-Intensive Businesses

TOURISM TAX

March 15, 2012

SPECTATOR EVENTS AND VISITOR ATTRACTIONS

March 15, 2012

Includes any business conducted on the site of the visitor attraction or spectator event.

Tourism Tax applies to (list is not all inclusive):• Admissions• Parking• Sales of products or services• Sales of food and drinks• Transportation

Examples of Visitor Attractions:Examples of Spectator Events:

• Auto Races • Carnivals• Craft shows• Music Festivals

• Fairs

• Rodeos• Sporting Events• Stage Shows

• Amusement Park• Antique Exhibits• Bumper Carts• Animal Exhibit• Miniature Golf Course

• Playhouses

• Racetracks• Reptile Exhibits• Shooting Preserves

RECREATIONAL SERVICES RECREATIONAL EQUIPMENT RENTAL

March 15, 2012

• Amusement Rides• Fishing Ponds• Tours• Fishing and Hunting Guides• Shooting Ranges• Trail Rides

Examples of Recreational Equipment (rented for 28 days or less)

• Bicycles• Firearms• Campers• Skis• Watercraft

Examples of Recreational Services:

VISITOR INTENSIVE BUSINESS

March 15, 2012

Tourism tax applies on sales made during June, July, August, and September IF 50% or more the total annual gross (all taxable sales) are from the sale of products (not services) during the months of June, July, August, and September.

• Antique Shop• Book Store• Candy Store• Flea Market• Gift Shop• Indigenous Arts/Crafts Shop

• Jewelry

• Lapidary Shop (stones/jewelry)

• Leather Goods Shop• Marina• Novelty Shop

• Pottery Shop• Rock Shop

• Souvenir Shop• T-Shirt Shop

Visitor Intensive Businesses are:

List includes all businesses listed in SDCL 10-45D-1(7). And can also be found in the Tourism Tax Fact.

REPORTING TOURISM TAX

March 15, 2012

Tourism tax is reported on the sales tax return in the city/special jurisdiction section of the return.

The code for Tourism Tax is 700-1

The rate of Tourism Tax is 1.5%

See Tourism Tax Facts for additional information.

City & Special Jurisdiction Tax Calculation Detail:City/Special Jurisdiction Name

Code Taxable Rate Tax Due

Tourism Tax 700-1 10000.00 1.5 150.00

March 15, 2012

Visit our Website: www.state.sd.us/drr2. Select Business Tax, then Publications.

Related Tax Facts:

• Bars/Restaurants• Exempt Entities• Exemption Certificate • Franchise Operations• Hotels, Motels & Campgrounds• Hunting & Fishing Services• Municipal Tax Information Bulletin• Tourism Tax

PUBLICATIONS

http://www.state.sd.us/drr2

March 15, 2012

Visit our Website: www.state.sd.us/drr2

Call Toll Free: 1-800-829-9188

Email the Business Tax Division: [email protected]

To lookup addresses for municipal tax information use: Available online at: www.state.sd.us/drr2

For information on Electronic Filing and Paying: www.state.sd.us/drr2


mailto:[email protected]



hospitality industry. 4% states sales taxup to 2% municipal sales tax1% municipal gross receipts...

Documents

municipal tax rates

municipal sales tax

applicable municipal

state sales tax

tourism tax facts

franchise tax facts

tourism tax taxes

municipal sales tax1