March 18, 1976
Mr. Joe Norton, Executive Secretary
Public Utilities Commission
State Capitol Building
Pierre, South Dakota 57501
OFFICIAL OPINION NO. 76-32
Are rural electric cooperatives exempt from tax?
Dear Mr. Norton:
You have requested an official opinion from this office in regard to the following factual situation:
The Public Utilities Commission special hearing fund law, SDCL 49-lA, became effective July 1, 1975. This law provides for an annual gross receipts tax to be levied on each public utility as defined in SDCL 49-34A. SDCL 49-lA-3 requires that the tax be levied "upon the annual gross received by it from its customers within the state of South Dakota during the preceding calendar year." SDCL 49-1A-4 requires that each public utility on July 1 of each calendar year file with the Public Utilities Commission "the amount of its gross receipts derived from customers of it within the state of South Dakota during the preceding calendar year."
On July 1, 1975 when SDCL 49-1A became effective, the definition of public utility in SDCL 49-34A included rural electric cooperatives and the Public Utilities Commission required that the filing by public utilities on July 1, 1975 also be complied with by rural electric cooperatives. However, HB 823 as passed by the 51st session amends the definition of "public utility" in §49-34-1(12) by excluding rural electric cooperatives. Therefore, effective July 1, 1976, public utilities as referred to in SDCL 49-lA-3 will no longer include rural electric cooperatives for the purpose of filing on July 1, 1976.
Based on the above facts you ask:
Does the tax levy provided for in SDCL 49-lA apply to rural electric cooperatives in connection with tax levies for the calendar year 1975?
SDCL 49-lA-5 provides:
The tax levied by this chapter shall become due and payable to the state treasurer on August first of each year following the filing of the report of such gross receipts.
Since SDCL 49-lA requires the filing of the annual report on July first of each year, and since the above cited statute does not require the tax levy to become due and payable until August first of each year, and since, as you state in your letter, HB 823 which will become law July 1, 1976, removed rural electric cooperatives from the definition of public utility in SDCL 49-34A-l, it appears to me that as of July 1, 1976, rural electric cooperatives will no longer be subject to the requirements of SDCL 49-1A. This in my opinion would mean that rural electric cooperatives would not be required to file the annual report on July 1, 1976, which SDCL 49-lA-4 requires of "public utilities," or to pay the tax for 1975 which the report concerns.
It is my opinion in this regard that in view of SDCL 49-1A, rural electric cooperatives are not obligated to pay the special hearing fund tax for 1975.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
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