Opinion ID: 901582
Heading Depth: 1
Heading Rank: 3

Heading: Assessment of Use Tax for Accounting and Legal Services

Text: [¶ 25.] Mauch next argues that he should not have been assessed use tax on accounting and legal services he obtained from out-of-state firms under SDCL 10-46-2.1, which provides in part: For the privilege of using services in South Dakota, except those types of services exempted by § 10-46-17.3, there is imposed on the person using the service an excise tax equal to four percent of the value of the services at the time they are rendered. However, this Court has previously concluded that when similar out-of-state services are used to conduct in-state business, the Department may properly impose use tax. Thermoset Plastics, Inc. v. S.D. Dept. of Rev., 473 N.W.2d 136, 139 (S.D.1991). In this case, the hearing examiner, the Department, and the circuit court found that Mauch failed to establish that any of the accounting and legal services were provided for something unrelated to his South Dakota business. On the contrary, the record reflects that he used those services in his engineering service business. Therefore, the use tax was correctly imposed.