April 22, 1985

Ms. Karen A. Johnson 
Custer County Deputy State's Attorney 
Post Office Box 31 
Custer, South Dakota 57730

OFFICIAL OPINION NO. 85-20

Sales taxability of county fair advertising booklet

Dear Ms. Johnson:

You have requested an official opinion of this office on the following factual situation:

FACTS: 

The Custer County Fair Board derives the majority of its funds from an appropriation in the Custer County budget.  The remainder of the County Fair funds comes from individual donations.  The County Fair Board uses these funds to put on the Custer County Fair each year.  One of the ways they do this is by having a County Fair booklet published in which various groups and individuals buy advertising.  The fair booklet lists the schedule of events planned, information regarding exhibits, how to enter exhibits, etc.  The publisher of the booklet intends to charge the County Fair Board sales tax for publishing the booklet.  The booklets are provided free to interested individuals throughout the County.

Based on these facts, you have asked the following question:

QUESTION: 

Is the Custer County Fair Board exempt from sales tax under state law for the publication of the County Fair booklets?

County commissioners are empowered to conduct county fairs by SDCL 7-27-3.  In lieu of doing it themselves or appointing a secretary or manager, they may appoint a County Fair Board under SDCL 7-27-10.  That board conducts and  has the full management and control of the county fair.

Since this is an authorized governmental function of county government, it is my opinion that SDCL 10-45-10, which exempts from the sales tax the gross receipts from sales of tangible personal property to public corporations in this state, would constitute an exemption for the gross receipts of the publisher for the charges he makes to the County Fair Board.

You have stated the Fair intends to give the booklets away, therefore, it would not have a use tax obligation in view of SDCL 10-46-7.  If, however, the County Fair Board sold the booklets, it would have a sales tax liability.

Respectfully submitted,

Mark V. Meierhenry
Attorney General