Opinion ID: 2073503
Heading Depth: 1
Heading Rank: 2

Heading: The Use Tax law as to supplies purchased.

Text: Though the briefs have only discussed the sales tax, the state claims the bank is liable for and collected use tax based on purchases of material and supplies made by it outside the state and shipped into the state for use in its banking business. Pertinent sections of South Dakota use tax statutes are set out hereafter. SDC 1960 Supp. 57.4302(3) Purchase' means any transfer, exchange or barter, conditional or otherwise, in any manner 297/> or by any means whatsoever, for a consideration.    (6) `Retailer' means and includes every person engaged in the business of selling tangible personal property for use, storage or other consumption    (7) `Retailer maintaining a place of business in the state' or any like term shall mean and include any retailer having or maintaining within this state    an office    or other place of business. SDC 1960 Supp. 57.4303(1) An excise tax is hereby imposed on the privilege of the use, storage, and consumption in this state of tangible personal property purchased on or after the effective date of this section for use in this state at the same rate of per cent of the purchase price of said property as is imposed by SDC 57.3201 (South Dakota Sales Tax Act).    (3) In addition, said tax is hereby imposed upon every person using, storing, or otherwise consuming such property within this state until such tax has been paid directly to a retailer or the Commissioner of Revenue as hereinafter provided. SDC 1960 Supp. 57.4304 The use in this state of the following tangible personal property is hereby specifically exempted from the tax imposed by this chapter. (1) Tangible personal property, the gross receipts from the sale of which are to be included in the measure of the tax imposed by (South Dakota Sales Tax Act)    (3) Tangible personal property, the storage, use or other consumption of which this state is prohibited from taxing under the Constitution or laws of the United States of America. SDC 1960 Supp. 57.4306 The tax herein imposed shall be collected in the following manner: (1) The tax upon the use, storage or other consumption of all tangible personal property which is sold by a retailer maintaining a place of business in this state    shall be collected by such retailer    (3) The tax upon the use, storage or consumption of all tangible personal property not paid pursuant to subsections (1) and (2) hereof shall be paid to the Commissioner of Revenue directly by any person using such property within this state, pursuant to the provisions of section 57.4311. The use tax had its origin in Chapter 276, Session Laws of 1939. Section 3 thereof then contained only the present subsections (1) and (3) of SDC 1960 Supp. 57.4303 when Scandrett v. Nord, 70 S.D. 527, 19 N.W.2d 344, was decided. The court wrote The Use Tax Act of 1939 imposes an excise tax upon the privilege of using, storing and consuming in this state tangible personal property. The court was undoubtedly referring to the two subsections just mentioned which remain in our law. This therefore is an attempt to levy a tax on the use, storage or other consumption of material and supplies for use by the bank in its banking business, and as SDC 1960 Supp. 57.4306 (3) requires the bank as a user to pay the tax directly to the Commissioner of Revenue, it is a tax proscribed by U.S.R.S. § 5219. We conclude the state may not, as to a national bank, levy and collect a sales tax on the property it sold nor a use tax on the property it bought.