Opinion ID: 900985
Heading Depth: 1
Heading Rank: 3

Heading: Timely Offer of Sales Tax Documents for Audit

Text: [¶ 18.] South Dakota law obliges taxpayers to cooperate with the Department of Revenue in an audit. In particular, SDCL 10-59-3 requires that records, books, and documents must be prepared for presentation to the auditor. Taxpayers must present all their documents evidencing reduction, deduction, or exemption of tax[.] Id. However, this language does not require documents to be in any specific form. Id.; see also In re Sales and Use Tax Liability of Pam Oil, Inc., 459 N.W.2d 251 passim (SD 1990). On the other hand, records not presented within the time frames of SDCL 10-59-3 and 10-59-7 need not be considered either by the auditor or by the Secretary of Revenue. [4] Pam Oil, 459 N.W.2d at 257. [¶ 19.] According to the record, AT & T did timely offer to submit at least some of the required information in electronic rather than paper form. Certain customer transactions were archived in electronic form only. The Department's auditor conceded that the untimely submitted paper documents, some of which were offered during the audit in electronic form, were relevant and reliable and would have been accepted to reduce the assessment if they had been presented in paper form before the audit ended. [¶ 20.] Nothing in our law prohibits submitting computer-stored information as documentary evidence. In principle, auditors should accept electronic submissions, if data accuracy can be validated and the information is retrievable when the auditor needs it. We think it unreasonable, in this electronic, computer-driven age, to require a telecommunications company, such as AT & T, to produce paper copies of all data that the company ordinarily archives only in electronic form. We remand to the Department to examine AT & T's electronic submissions that were timely offered and to adjust, as appropriate, AT & T's tax assessment with respect to the transactions in question. [5] [¶ 21.] Affirmed in part, reversed in part, and remanded. [¶ 22.] GILBERTSON, Chief Justice, and SABERS, and AMUNDSON, Justices, and GORS, Acting Justice, concur.