October 26, 1984

Mr. Dennis D. Evenson 
Deuel County State's Attorney 
Post Office Box 276 
Clear Lake, South Dakota 57226

OFFICIAL OPINION NO. 84-43

Time for imposition of delinquency penalty on gross receipts tax paid by a telephone cooperative

Dear Mr. Evenson:

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

FACTS: 

Deuel Telephone Cooperative Association of Clear Lake is required pursuant to Chapter 10-33 of the South Dakota Codified Laws to pay a gross revenue tax.  This revenue tax becomes due and owing pursuant to SDCL 10-33-25 on September 1 of each year.  The tax is to be paid at the County Treasurer's Office.  In 1984, August 31 was on a Friday and September 1 was on a Saturday.  Of course, the Deuel County Treasurer's Office was closed on September 1, since it was a Saturday.  Sunday was September 2 and Labor Day was on September 3. On September 4 the office manager carried to the Deuel County Treasurer's Office a check for the amount of the gross revenue tax. The Deuel County Treasurer, pursuant to her instructions in the statute, advised the office manager that a penalty would be imposed.  The Deuel Telephone Cooperative Association is of the understanding that if the check had been put in the mail on Friday afternoon, addressed to the County Treasurer, that, although the Treasurer would not have received it until Tuesday, September 4, that the penalty would not have been imposed.  However, inasmuch as the gross revenue tax was handed over to the Treasurer, now we have the question whether or not the penalty should be properly imposed.  The penalty provision is set forth in SDCL 10-33-27.

Concerning these facts you have asked the following questions:

QUESTIONS: 

1.  Where the last day for paying the taxes in 1984 was a Saturday, a day that the Courthouse is closed, and Monday was a holiday, does SDCL 15-6- 6(a) apply? 

2.  Is it correct to assume that if the check had been put in the mail on Friday or Saturday, before September 1, and received by the Treasurer on Tuesday morning, that the delinquency penalty should not be imposed? 

3.  Assuming the answer to the foregoing question is that the penalty should not be imposed, should a penalty be imposed for hand delivering the gross revenue tax to the County Treasurer on September 4, rather than sending the tax through the mail? 

4.  Question No. 1 assumed that the entire tax had been paid and the penalty paid under protest.  Further assuming that it should be your opinion that the penalty should not be imposed, what is the proper procedure to use for the recovery of the penalty?

The time of payment for taxes under SDCL 10-33, that, is, the first day of September, fixes a day certain rather than the period of time allowed for other taxes.  For example, normal property taxes are due as of January 1, of the year following the assessment, SDCL 10-21-4.  They are not, however, delinquent  if they are paid one-half by May 1 and the second half by October 31, SDCL 10-21-23. There the taxpayer has from January 1, the due date to and including April 30 to make the payment.  An official opinion of this office, 71-44, held in this instance the penalty provided would attach even though April 30 fell on a Sunday.  The rationale was that days of grace apply only to the date upon which taxes are due and since persons had from January 1 to April 30 to pay without penalty, the fact they chose to wait until the final day and then found the courthouse closed did not afford relief from the penalty.

The same situation does not prevail in the factual situation you have raised.  Here the statute in question, 10-33-25, fixes the day payment is to be made.  It does not provide for a period of time within which they are due and owing.  SDCL 15-5-5(a) with respect to computation of time and permitting acts to be done without penalty or default, provides in part, '. . . The last day of a period so computed shall be included, unless it is a Saturday, a Sunday, or a legal holiday.  . . .'

IN RE QUESTION NO. 1:

The answer is YES, the payment may be made on the next business day after the holiday.

IN RE QUESTION NO. 2 AND 3:

The check may either be postmarked before September 1 and received on the 4th or it may be hand delivered on the 4th without penalty.

IN RE QUESTION NO. 4:

With respect to your inquiry as to the return of the penalty paid under protest, it is my opinion that the commissioners by appropriate resolution may authorize the same.  As our Supreme Court noted in part in the case of Harris v. Stearns, 20 S.D. 622, 108 N.W. 247, penalty was provided '. . . to enforce so far as possible the prompt collection of all taxes from those who are under moral as well as legal obligation to pay the same, . . ..'  In the situation you present the tax was promptly paid and the penalty should have not been applied.  The facts here distinguish this ruling from that in Official Opinion 1955-56 A.G.R. 402.

Respectfully submitted,

Mark V. Meierhenry
Attorney General