STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

August 26, 1969

Larry F. Hosmer
State's Attorney, Yankton County
Yankton, South Dakota 57078

OFFICIAL OPINION NO. 69-74

Moneys and credits tax

Dear Mr. Hosmer:

You have requested my official opinion on the following situation:

" ... The Farmers Coop Association of Yankton, South Dakota is the owner and holder of certain shares of stock in Farmland Industries of Kansas City, Missouri "

Concerning this situation you have asked:

". . . Is such ownership subject to moneys and credits tax provided by SDCL 1967 10-16..."

SDCL 1967 10-16-9 indicates the classes of moneys and credits to be listed. Subsection 15 states, ". . . shares of stock of corporations, except shares of corporations whose tangible property is all or substantially all situated within this state ... " It is noted that Sec. 10-16-5 does not require the imposition of the tax on "money" or "moneys" as defined in Subsection 1 of 10-16-1 or to "annuities or royalties" or "deposits" not drawing interest in banks, trust companies or similar financial institutions or to "checks," "bank drafts" or similar demands for money or evidences of indebtedness not drawing interest ... " Concerning this exclusion from the moneys and credits tax, the Attorney General, in an opinion found at 1957-58 AGR 1958, had this to say:

". . . By this statute the legislature declared that certain classes of moneys and credits would not be subject to the general moneys and credits tax and it is my opinion that contracts for sale of real estate (stock) do not come within such exempted [sic] classes. It certainly could not be said that they are either 'money or moneys' as elsewhere defined nor are they 'deposits' not drawing interest in banks, trust companies or similar financial institutions, nor 'checks,' 'bank drafts' or similar demands for money or similar evidence of indebtedness not drawing interest. The law regarding such exemptions relates to instruments drawn on financial institutions and not drawing interest and does not relate to instruments such as contracts for deed . . ." (stock certificates). In this connection see also (1965-66 AGR 169).

In my opinion, these stock certificates not being otherwise exempt and in the event they do not represent shares of stock in a corporation whose property is all or substantially all situated in the State of South Dakota would be taxable to the Farmers Cooperative Association.

Respectfully submitted,

Gordon Mydland
Attorney General