ARSD Article 64:26 — BANKS AND FINANCIAL INSTITUTIONS

REVENUE REVENUE

Chapter 64:26:01 Definitions

ARSD 64:26:01:01 Definitions

Terms used in this article mean:

(1) "Department," the Department of Revenue and Regulation;

(2) "Secretary," the secretary of revenue and regulation;

(3) "Principal place of business," the place from which the taxpayer manages the main part of its business operations, transacts its principal affairs, or conducts its greatest volume of business operations;

(4) "Net federal income tax," that federal income tax in excess of any federal income tax refund received during the tax year for which the deduction is claimed;

(5) "Non-arm's length transaction," a transaction between two or more related corporations consumated at a consideration which is more or less than the amount that would have been charged in an independent transaction between unrelated corporations under similar circumstances.

History

• Source: SL 1975, ch 16, § 1; 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995; 30 SDR 58, effective November 5, 2003.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-1.

Chapter 64:26:02 Administration of program

ARSD 64:26:02:01 Repealed

Time for filing.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:02:02 Repealed

Basis of returns.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:02:03 Repealed

Method of accounting.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:02:04 Federal income tax return to be submitted with state return

In addition to the South Dakota return, all financial institutions shall submit to the department a copy of the federal income tax return and schedules filed with the Internal Revenue Service for the tax year.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-1-33, 10-43-10.1.

ARSD 64:26:02:05 Repealed

Supplementary return required upon subsequent increase in income -- Exception if increase results from departmental adjustment.** Repealed.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987; SL 2016, ch 63, § 9, effective July 1, 2016.

ARSD 64:26:02:06 Repealed

Supplementary return permitted upon subsequent decrease in income -- Exception if decrease results from departmental adjustment.** Repealed.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 16 SDR 76, effective November 1, 1989; SL 2016, ch 63, § 10, effective July 1, 2016.

ARSD 64:26:02:07 Consolidated returns

The secretary shall demand a consolidated return when it is established that a taxpayer has engaged in non-arm's length transactions which cause a material distortion in net income.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-36.

ARSD 64:26:02:08 Repealed

Exclusion of factors.** Repealed.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987; repealed, SL 2014, ch 61, § 14, effective January 1, 2015.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-29.1.

ARSD 64:26:02:09 Repealed

Separate accounting -- When taxpayer may petition for.** Repealed.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987; repealed, SL 2014, ch 61, § 15, effective January 1, 2015.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-29.1.

ARSD 64:26:02:10 Repealed

Separate accounting -- When secretary may require.** Repealed.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987; repealed, SL 2014, ch 61, § 16, effective January 1, 2015.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-29.1.

ARSD 64:26:02:11 Certain corporations not in the business of making loans

A corporation which makes loans to other members of the controlled group and not to unrelated third parties is not considered to be in the business of making installment repayment and open-end loans as described in SDCL chapter 10-43. For purposes of this rule, the term "controlled group" includes any group as defined by SDCL 10-45-20.3 or any group consisting of the corporation and a subsidiary in which the corporation has a 50 percent or greater ownership interest.

This section applies only if the primary business of the controlled group is the production and sale of tangible personal property and the loans are made for the purpose of fiscal control and performance measurement in lieu of capital contributions and not for commercial lending purposes.

History

• Source: 20 SDR 73, effective November 25, 1993; 20 SDR 149, effective March 22, 1994.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-1(4).

ARSD 64:26:02:12 Apportionment of bank franchise tax revenues among counties

The tax remittances for the branches of depository institutions shall be distributed to each county pro rata based on the relationship the deposits at all branches in each county bear to the total deposits of the institution. The deposit information upon which this distribution is based is the deposit information filed with the Federal Deposit Insurance Corporation on June 30 of the tax year for which the tax return is being filed. The tax remittances from non-depository institutions shall be distributed pro rata based on the relationship net profits at all branches in each county bear to the total net profits of the non-depository institution.

History

• Source: 25 SDR 167, effective July 1, 1999; 46 SDR 66, effective November 26, 2019.
• General Authority: SDCL 10-43-42.1(1)(2).
• Law Implemented: SDCL 10-43-76.

Chapter 64:26:03 Income -- Interpretive rules

ARSD 64:26:03:01 Repealed

Bequest to an executor.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:02 Repealed

Noncash dividends.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:03 Repealed

Stock dividends.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:04 Repealed

Corporate liquidations.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:05 Repealed

Dividends from reserves or capital.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:06 Repealed

Dividends paid from tax exempt income.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:07 Repealed

Stock sold between dividend dates.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:08 Repealed

Items included in gross income and compensation.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:09 Repealed

Commissions on premiums from insurance renewals.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:10 Repealed

Constructive receipt of income.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:03:11 Dividends received from other financial institutions

Dividends received from other financial institutions which are subject to the South Dakota tax on financial institutions shall be subtracted from net income, provided such dividends were not excluded in determining federal taxable income.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-10.3.

ARSD 64:26:03:12 Net operating loss carryover

Repealed.

History

• Source: 16 SDR 76, effective November 1, 1989; repealed, SL 2014, ch 60, § 5, effective January 1, 2015.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-10.1, 10-43-10.4.

ARSD 64:26:03:13 Filing of separate returns of financial institutions

To determine if financial institutions sharing a common parent, such as a bank holding company, shall be required to file separate returns, the secretary shall consider the following factors:

(1) Whether there is a separate charter for each financial institution;

(2) The extent of the flow of goods and services between an institution and its parent;

(3) Whether management oversight by the parent is limited to strategic decisions affecting the operation of all subsidiaries generally, not individual institutions;

(4) Whether there would be distortion of county income through the use of loss deductions incurred by institutions not doing business in the affected county;

(5) The presence or absence of common administrative officers or procedures; or

(6) Whether each institution is conducting business in a manner consistent with separate entities.

History

• Source: 16 SDR 76, effective November 1, 1989.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-36.

Chapter 64:26:04 Expenses -- Interpretive rules

ARSD 64:26:04:01 Repealed

Allowances for compensation must be reasonable.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:02 Repealed

Compensation paid employees domiciled outside state.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:03 Repealed

Compensation paid other than in cash.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:04 Repealed

Bonuses to employees.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:05 Repealed

Traveling expenses.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:06 Repealed

Donations or contributions.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:07 Repealed

Rentals.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:08 Repealed

Automobile expenses.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:09 Repealed

Repairs.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:10 Repealed

Business insurance premiums.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:11 Repealed

Interest paid.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:12 Repealed

Taxes paid.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:13 Repealed

South Dakota sales and use tax.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:14 Repealed

Federal income taxes.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:15 Repealed

Assessments for local benefits.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:16 Repealed

Bad debts.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:17 Repealed

Losses of money loaned.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:18 Repealed

Deductible losses.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:19 Repealed

Sudden obsolescence of property.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:20 Repealed

Depreciation -- When allowed.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:21 Repealed

Depreciation -- Bookkeeping required.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:22 Repealed

Computation of depreciation.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:23 Repealed

Depreciation -- When not allowed.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:24 Repealed

Depreciation of leasehold improvements.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:25 Repealed

Depreciation of residence and personal property.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:26 Repealed

Depreciation of automobiles.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:27 Repealed

Contributions.** Repealed.

History

• Source: SL 1975, ch 16, § 1; repealed, 4 SDR 35, effective December 22, 1977.

ARSD 64:26:04:28 Federal income tax deductible -- Other income, privilege, and franchise taxes not deductible

Net federal income taxes are deductible from taxable income in the year in which they are paid when the cash method of accounting is used in determining the net income of the taxpayer. Net federal income taxes are deductible from taxable income in the tax year in which they are incurred when the accrual method of accounting is used in determining the net income of taxpayer. Any other income, franchise, or privilege taxes which were deducted to determine federal taxable income are not deductible.

History

• Source: 4 SDR 35, effective December 22, 1977; 13 SDR 129, 13 SDR 134, effective July 1, 1987.
• General Authority: SDCL 10-43-42.1.
• Law Implemented: SDCL 10-43-10.3.