Gross receipts from services and sales of tangible personal property and any product transferred electronically to religious education institutions are exempt from sales tax. The exemption does not extend to purchases for the personal use of officials, members, and employees or to be used in the operation of a taxable business. Institutions operating cafes, dining rooms, or book stores or vending other merchandise must secure a sales tax license and report sales tax on their receipts from such operations.

1. (1) The institution is owned, leased, operated by, or affiliated with a religious society which meets the following requirements:

   1. (a) A religious society is a society which exists to worship God. The members of the religious society meet regularly to promote their religious beliefs;
   2. (b) The religious society is organized for religious purposes and is nonprofit;
   3. (c) The religious society is exempt under 26 U.S.C.S § 501(c) or (d) of the Internal Revenue Code in effect on January 1, 1983;
2. (2) One of the purposes of the institution is the promotion of its religious views through education; and
3. (3) The educational institution has a definite physical location with a regular faculty, classes, and established course of study.

Qualification as a religious educational institution depends upon the following factors:

Source: SL 1975, ch 16, § 1; 11 SDR 1, effective July 19, 1984; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995; 35 SDR 48, effective September 8, 2008.

General Authority: SDCL 10-45-47.1.

Law Implemented: SDCL 10-45-14.