STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

February 13, 1970

L. J. Hertz
State's Attorney, Douglas County
Armour, South Dakota 57313

OFFICIAL OPINION NO. 70-5

Collection of personal taxes from buyer of property

Dear Mr. Hertz:

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

"A" owned certain laundromat personal property for several years, during which time he did not pay the personal property taxes lawfully levied against such property. In 1968 "A" sold such property to "B" without first paying the delinquent taxes and neither party took advantage of the Bulk Sales procedures. "B" has paid the taxes assessed against such property from the date he took possession, and the County Treasurer made proper entry on the tax receipts showing the earlier unpaid taxes.

Concerning this factual situation, you have inquired as to whether or not the lien for personal property taxes follows the property into the hands of the purchaser.

SDCL 1967 10-9-3 provides as follows:

. . . All taxes assessed upon personal property within this state shall be a first lien on all personal property of the person against whom personal taxes are assessed, from and after January 1st in each year. . . .

It is generally held that personal property tax liens do not follow the property into the hands of the purchaser. See 1947-48 AGR 373 and the decision in .J. I. Case Threshing Machine Company v. Bentson, 57 S.D. 244, 231 N.W. 984.

Although you have stated that the uniform commercial code on bulk transfers was not complied with, it is my opinion that under that section, SDCL 1967 57-24, the property sold, as you have described it, that is laundromat "A", the machines and other personal property involved in the operation of the laundromat would not in and of itself make the enterprise subject to the bulk sales law and thereby making ineffective against a creditor, a bulk transfer where the act was not complied with. SDCL 1967 57-24-4 provides:

. . . The enterprises subject to this chapter are all those whose principal business is the sale of merchandise from stock including those who manufacture what they sell . . .

Since a laundromat is not primarily engaged in the business of sale of merchandise from stock, it is my opinion that the provisions of 57-24-15 would not work against the transferee and therefore the lien for unpaid personal taxes of "A" would not follow the property into the hands of "B".

Respectfully submitted,

Gordon Mydland
Attorney General