If conditional sales contracts are assigned or negotiated by the retailer to a finance company, sales tax must be paid by the retailer on the full amount of the purchase price under the contract at the time the retailer makes the required tax remittance for the reporting period in which the sale was made.

If repossession by the finance company becomes necessary, the retailer may deduct as a bad debt, as provided in SDCL 10-45-30, that portion of the tax previously paid, provided that in liquidation of the repossessed merchandise the retailer has actually suffered a loss and the gross receipts prove to be less than anticipated under the original contract price.

If the merchandise repossessed is later sold by the retailer to a consumer, the tax applies to the second sale the same as it did to the first sale.

Source: SL 1975, ch 16, § 1; 5 SDR 60, effective January 25, 1979; 7 SDR 80, effective February 22, 1981; 12 SDR 111, effective January 12, 1986; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995; 25 SDR 167, effective July 1, 1999; 28 SDR 178, effective July 1, 2002; 33 SDR 226, effective June 27, 2007.

General Authority: SDCL 10-45-47.1(2).

Law Implemented: SDCL 10-45-1(10) , 10-45-2 , 10 -45-30.