Welcome Wagon Intern., Inc. v. South Dakota Dept. of Revenue, No. 13528

CourtSupreme Court of South Dakota
Writing for the CourtFOSHEIM
Citation318 N.W.2d 5
Decision Date07 April 1982
Docket NumberNo. 13528
PartiesWELCOME WAGON INTERNATIONAL, INC., Appellant, v. SOUTH DAKOTA DEPARTMENT OF REVENUE, Appellee.

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318 N.W.2d 5
WELCOME WAGON INTERNATIONAL, INC., Appellant,
v.
SOUTH DAKOTA DEPARTMENT OF REVENUE, Appellee.
No. 13528.
Supreme Court of South Dakota.
Argued Jan. 20, 1982.
Decided April 7, 1982.

John S. Lovald, Pierre, for appellant.

Joe Nadenicek, Asst. Atty. Gen., Pierre, for appellee, Mark V. Meierhenry, Atty. Gen., Pierre, on brief.

FOSHEIM, Justice.

The South Dakota Department of Revenue (Department) determined that the revenues of Welcome Wagon International, Inc. (appellant), are subject to the tax imposed by the Retail Sales and Service Tax Act, SDCL ch. 10-45. The circuit court affirmed the Department's determination. We reverse.

Appellant is a nationwide company which employs local agents to contact new residents, newlyweds and couples with a new born baby within the agent's locality. The agent contacts these individuals at their homes, explains the various business services available within the area, and leaves them with promotional literature. Appellant's income is generated from the businesses it represents when it contacts local residents. Each business executes a contract agreeing to pay appellant for its services.

The sole issue on appeal is whether appellant is exempt from the Retail Sales and Service Tax Act by reason of the exemption granted to "advertising services" in SDCL 10-45-12.1. It is the position of the Department that the services of appellant are subject to tax pursuant to SDCL 10-45-5.2.

SDCL 10-45-5.2 specifically subjects certain services, as enumerated in the 1972 Standard Industrial Classification Manual (SIC Manual), to taxation. The SIC Manual is prepared by the Statistical Policy Division

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of the Federal Government's Office of Management and Budget. Among the groups made subject to the tax by SDCL 10-45-5.2 is "business services (major group 73)." In the SIC Manual, classified under the general heading of Major Group 73--Business Services, are various types of services designated by group number and each group number is subdivided by industry number. For example, Group No. 731--Advertising is subdivided into four categories: Industry No. 7311--Advertising Agencies; Industry No. 7312--Outdoor Advertising Services; Industry No. 7313--Radio, Television, and Publisher's Advertising Representatives; Industry No. 7319--Advertising, Not Elsewhere Classified. Welcome Wagon, by name, is classified in the SIC Manual under Major Group 73--Business Services in Group No. 739--Miscellaneous Business Services, Industry No. 7399--Business Services Not Elsewhere Classified.

SDCL 10-45-4 provides, in part, that "any service as defined by SDCL 10-45-4.1 1 shall be taxable, unless the service is specifically exempt from the provisions of this chapter." Appellant claims exclusion under the exemption for "advertising services" contained in SDCL 10-45-12.1, 2 entitled "services specifically exempt from tax." Since it appears undisputed that the services of appellant fall within the...

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7 practice notes
  • Sales Tax Liability of Valley Queen Cheese, Matter of, No. 15148
    • United States
    • Supreme Court of South Dakota
    • 18 Marzo 1986
    ...changes cause natural refrigeration to occur. Page 41 Valley Queen cites our decision in Welcome Wagon Intern. v. S.D. Dept. of Revenue, 318 N.W.2d 5 (S.D.1982), as authority for the argument that cheese warehousing should be included in farm product warehousing under Industry Number 4221. ......
  • Sioux Falls Shopping News v. Dept. of Rev., No. 24616.
    • United States
    • Supreme Court of South Dakota
    • 23 Abril 2008
    ..."advertising services." [¶ 21.] Shopping News draws from our decision in Welcome Wagon Intern., Inc. v. South Dakota Dept. of Revenue, 318 N.W.2d 5 (S.D.1982), to support its claimed exemption. In Welcome Wagon, the circuit court upheld Department's determination that Welcome Wagon's revenu......
  • GRACELAND COLLEGE v. Dept. of Revenue, No. 22347.
    • United States
    • Supreme Court of South Dakota
    • 26 Noviembre 2002
    ...long as one carries the burden of proving that they fall within the exemption. Welcome Wagon Int'l, Inc. v. South Dakota Dep't of Revenue, 318 N.W.2d 5, 6-7 (S.D.1982). Therefore, a claim of exemption under "continuing education" is analyzed like any other exemption granted by the [¶ 13.] S......
  • Sioux Falls Newspapers, Inc. v. Secretary of Revenue, No. 51-12054-OS
    • United States
    • Supreme Court of South Dakota
    • 6 Junio 1988
    ...of SDCL 10-45-12.1; as such, it is absolutely entitled to exemption status. Welcome Wagon Int'l, Inc. v. South Dakota Dep't of Revenue, 318 N.W.2d 5 As this case pertains to charges for advertising services, and as our Page 811 state law clearly exempts taxation for advertising services, it......
  • Request a trial to view additional results
7 cases
  • Sales Tax Liability of Valley Queen Cheese, Matter of, No. 15148
    • United States
    • Supreme Court of South Dakota
    • 18 Marzo 1986
    ...changes cause natural refrigeration to occur. Page 41 Valley Queen cites our decision in Welcome Wagon Intern. v. S.D. Dept. of Revenue, 318 N.W.2d 5 (S.D.1982), as authority for the argument that cheese warehousing should be included in farm product warehousing under Industry Number 4221. ......
  • Sioux Falls Shopping News v. Dept. of Rev., No. 24616.
    • United States
    • Supreme Court of South Dakota
    • 23 Abril 2008
    ..."advertising services." [¶ 21.] Shopping News draws from our decision in Welcome Wagon Intern., Inc. v. South Dakota Dept. of Revenue, 318 N.W.2d 5 (S.D.1982), to support its claimed exemption. In Welcome Wagon, the circuit court upheld Department's determination that Welcome Wagon's revenu......
  • GRACELAND COLLEGE v. Dept. of Revenue, No. 22347.
    • United States
    • Supreme Court of South Dakota
    • 26 Noviembre 2002
    ...long as one carries the burden of proving that they fall within the exemption. Welcome Wagon Int'l, Inc. v. South Dakota Dep't of Revenue, 318 N.W.2d 5, 6-7 (S.D.1982). Therefore, a claim of exemption under "continuing education" is analyzed like any other exemption granted by the [¶ 13.] S......
  • Sioux Falls Newspapers, Inc. v. Secretary of Revenue, No. 51-12054-OS
    • United States
    • Supreme Court of South Dakota
    • 6 Junio 1988
    ...of SDCL 10-45-12.1; as such, it is absolutely entitled to exemption status. Welcome Wagon Int'l, Inc. v. South Dakota Dep't of Revenue, 318 N.W.2d 5 As this case pertains to charges for advertising services, and as our Page 811 state law clearly exempts taxation for advertising services, it......
  • Request a trial to view additional results

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