South Dakota Administrative Rules › Title 64 - REVENUE › Article 64:06 - Sales tax › Chapter 64:06:01 - Administration of program › Section 64:06:01:38 - Relief agencies

Current through Register Vol. 51, page 10, July 15, 2024
Application for exempt status must be made to the department. Exempt
	 status shall be granted upon a showing that the applicant meets the
	 requirements of SDCL
	 10-45-10. In determining the
	 qualifications for exemption as a relief agency the following shall be
	 considered, but will not be exclusive, in the final determination of the
	 exemption status request:
(1) The
  relief agency is organized and conducted solely for the benefit of the general
  public and for relief of the public burden;
(2) A person who needs the services of the
  relief agency is not turned away because the person is not able to pay for
  services;
(3) The relief agency
  does not provide for gain or profit of any private member of the agency except
  in the form of a salary;
(4) Upon
  dissolution the assets of the agency are used for charitable
  purposes;
(5) The relief agency
  does not present or appear to present any obstacles of any character, such as
  founders' fees, mandatory assignment of income or property, or minimum fees, to
  those who need the benefits of the agency;
(6) The average cost of services of the
  relief agency exceeds the amount of fees actually collected;
(7) A major source of income of the relief
  agency results from gifts, bequests, or donations, not current
  charges;
(8) Allocation of
  facilities or services of the relief agency is not related in any way to
  ability to pay for such facilities or services; and
(9) The relief agency has an exemption
  granted pursuant to section 501(c)(3) of the Internal Revenue Code.
Once an exempt status is granted, such a status must be renewed by the
	 relief agency every five years with the filing of a new application, bylaws,
	 articles of incorporation, constitution or articles of
	 association.
General Authority:
SDCL
		10-45-47.1.
Law Implemented:
SDCL
		10-45-10.
Declaratory Rulings:
The Salvation Army is a nonprofit relief agency not subject to sales
		tax. Secretary of Revenue Declaratory Ruling No. 75-1.
A nonprofit corporation whose general purpose is to provide services
		to older persons in the community is not entitled to exempt status as a relief
		agency under SDCL
		10-45-10 because its resources are
		not devoted exclusively to the relief of the poor, distressed, or
		underprivileged. Secretary of Revenue Declaratory Ruling 92-2, December 29,
		1992.
Court Decisions: A nonprofit corporation exempt from federal income
		tax, which provides free legal service to persons of low income and is funded
		by the federal government, qualifies as a relief agency under SDCL
		10-45-10 and does not have to meet
		each factor enumerated in § 64:06:01:38. East River Legal Services vs
		State, Department of Revenue, 303 N.W. 2d 379 (March 18, 1981).
A nonprofit corporation exempt from federal income taxes, which
		provides health and nutrition services for the elderly; education and
		development services for "headstart" and day care for children; weatherization,
		self-help gardens, and fuel assistance services for low income and elderly
		families; employment services for low income persons; and assistance and
		guidance to low income persons for community development, all without cost to
		recipients except for certain day care services, the activities of which are
		financed by the federal government, qualifies as a relief agency and is exempt
		from having to pay sales tax. Western South Dakota Community Action Program,
		Inc. vs State, Department of Revenue, 303 N.W. 2d 379 (March 18,
		1981).