March 10, 1976
Mr. Lyle Wendell, Secretary
Department of Revenue
Capitol Lake Plaza
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 76-28
Authority for interstate audits under Multistate Tax Compact
Dear Mr. Wendell:
You have asked my official opinion on Article VIII of Senate Bill 81, known as the Multistate Tax Compact. Specifically, you have inquired as to whether Article VIII is effective in South Dakota so as to permit the cooperation in interstate audits.
The Multistate Tax Compact is a compact of some twelve articles between states whose legislatures have adopted the same, thereby entering the state into the Multistate Tax Commission.
Section 1 of Article VIII reads as follows:
This article shall be in full force only in those party states as specifically provided therefor by statute.
The article then goes on through nine numbered subparagraphs to provide the mechanics, procedures and other arrangements with regard to interstate audits. As originally introduced, section 7 of Article XII read:
Article VIII of the Multistate Tax Compact relating to interaudits (sic) shall be in force in and with respect to the state of South Dakota.
By amendment in the Senate that section, together with five other sections of the Act, was deleted, thus giving rise to your question as to whether or not Article VIII is in effect.
This compact, before introduction as a bill in South Dakota contained certain prefatory and explanatory materials which were not intended to be enacted into law and, in fact, had no substantive effect as far- as the bill is concerned. Section 1 of Article VIII is one of these explanatory statements which in this case, in my opinion, is surplusage so far as the legal effect of Article VIII itself is concerned.
Section 1 of Senate Bill 81 reads as follows:
The multistate tax compact is hereby enacted into law and entered into with all jurisdictions legally joining therein in the form substantially as follows.
South Dakota did adopt "substantially" the Compact. Senate Bill 81 expresses the clear intention of the Legislature to adopt the same as laid before it in the twelve articles. Article VIII, paragraphs 2 through 9, spells out the mechanics of interstate audits and it is my opinion that such article is in full force and effect, as well as the balance of the articles, on the effective date of the Act.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
WJJ:JD:dh
