Opinion ID: 900864
Heading Depth: 1
Heading Rank: 4

Heading: Educational Services

Text: [¶ 7.] SkillPath claims its services qualify as a vocational school exempt from tax under Major Group 82 educational services. SDCL 10-45-12.1 adopts the classification scheme set forth in the Standard Industrial Classification Manual (SIC) [2] making it necessary to examine the SIC Manual in order to determine the proper classification. An updated version of the SIC Manual, the North American Industry Classification System (NAICS Manual), has been formulated, however the legislature has not incorporated the NAICS Manual into SDCL 10-45-12.1. Creation of tax exemptions is exclusively within the province of the Legislature, not the judiciary. H & R Roofing of South Dakota, Inc. v. Dep't of Revenue, 2001 SD 39, ¶ 10, 623 N.W.2d 508, 511. Application of the NAICS Manual would in effect create tax exemptions not granted by our legislature. [¶ 8.] SkillPath claims it falls under vocational school of the SIC Manual Industry Group 824. This Court has said, [w]ords used by the legislature are presumed to convey their ordinary, popular meaning, unless the context or the legislature's apparent intention justifies departure. Meyerink v. Northwestern Public Service, 391 N.W.2d 180, 183-184 (S.D. 1986) (citing State v. Big Head, 363 N.W.2d 556, 559 (S.D.1985)). The plain meaning of vocational school is a school, esp. one on a secondary level, that offers instruction and practical introductory experience in skilled trades such as mechanics, carpentry, and plumbing. American Heritage Dictionary 1511 (3d ed 1997). [¶ 9.] The SIC Manual provides the following examples of vocational schools: data processing schools, computer repair training, secretarial schools, court reporting school, and truck driving schools. It is clear from the plain meaning of vocational school and the examples provided in the SIC Manual that such programs are intended to teach one the skills necessary to work in a particular occupation or vocation. SkillPath's seminars are not aimed at providing one with the necessary skills to enter into a specific vocation or occupation. SkillPath is not a degree granting institution nor does SkillPath have a formal course of study. SkillPath offers seminars ranging in length from one to two days covering a variety of topics. SkillPath does not market its seminars to those interested in learning a vocation but targets those already working in a business. Ninety-five percent of SkillPath's attendees have their fees paid by their employers. [¶ 10.] SkillPath does offer different computer related seminars such as Computer Repair Training and CompuMaster-PC Troubleshooting in which the attendees actually take a computer apart. However, attending one of SkillPath's seminars will not qualify one to become a computer repairman or a computer consultant. These courses are directed more towards being able to solve problems with one's own computer, not for the purpose of teaching a vocation. [¶ 11] SkillPath's seminars are not aimed at teaching one a new vocation or specific occupation and cannot be classified as a vocational school. We held in Matter of the State Sales and Use Tax Liability of Pam Oil, Inc., 459 N.W.2d 251, 255 (S.D.1990) that the general rule has been established that the taxpayer has the burden of proving entitlement to a statutory exemption (citations omitted). SkillPath has failed to meet this burden. To classify SkillPath as a vocational school would require this Court to legislate by broadening the definition of vocational school contrary to the premise that [s]tatutes allowing tax exemptions are exactingly and narrowly construed in favor of the taxing entity. Watertown Coop. Elevator Ass'n v. South Dakota Dep't of Revenue, 2001 SD 56, ¶ 10, 627 N.W.2d 167, 171 (citing Matter of State & City Sales Tax Liability of Quality Service Railcar Repair Corp., 437 N.W.2d 209, 211 (S.D. 1989)). It is clear the legislature did not intend SkillPath to be exempt from taxation as a vocational school. Exemptions are a matter of legislative grace and doubts are resolved in favor of taxation. Matter of Townley, 417 N.W.2d 398, 400 (S.D.1987). The legislature obviously has not graced Graceland with an exemption.