6 - Tax Committee Presentation - 2016 - DOR Saturday, January 16, 2016 9:44 AM South Dakota Department of Revenue Prof essio 11al . Dependable. Acco11111able ... in partnership with South Dakota 1
~"c Dep Andy Gerlach I Secretary I David Wiest Deputy Secretary Secretariat ..... ..,, ....... , .. -1 Audits I Business Tax I I Administration Motor Vehicles Toni Richardson Rachel Heam Dou1 Schinkel Michael Houdyshell Lisa Weyer Director Director Director Director Director Commission on Gamine I SDlottery I I Le1al Andyfercel Norm Lln1le Larry Eliason Director Executive Director E>tecutlve Secretary 2
FY2014 FY2015 Type of Tax Sales & Use Tax $833,618,413 $840,849,383 Fuel Exci se Tax $156,736,026 $169,843,878 A 0.5% sales tax Lottery $106,221, 025 $1 12,074,219 increase equates Contractors' Excise Tax $90,409,495 $100,116,439 to about $107.4 Special Taxes $112,707,544 $94,703,283 Million Vehicle Excise Tax $77,353, 826 $82,593,933 Tourism Tax $10,671, 323 $11,413,097 Deadwood Gaming $8,885,345 $8,993,841
Sales Tax (%) Gas Tax (cts Highest Cigarette Tax Per Capita per gallon) Income Tax (per pack) Tax Burden Rate(%) 4.000% 0.00% South Dakota $0.280 $1.53 $1,886 6.000% 8.98% Iowa $0 .210 $1.36 $2,662 6.875% 9.85% Minnesota $0.285 $2.83 $4,238 Montana $0 .270 0.000% 6.90% $1.70 $2,593 $0.256 5.500% 6.84% $0.64 $2,592 Nebraska 5.000% 3.22% North Da kota $0 .230 $0.44 $8,282 4.000% 0.00% Wyoming $0 .230 $0.60 $3,876 So urce : U. S. Burea u of th e Census and Bu rea u of Ec o no m ic Analys is 4
75th Annual Sturgis Rally • $2,440,215 collected, compared to $1,361,924 in 2014 • Record number of licensed vendors at 1,438 • Department of Revenue mobile offices at Sturgis City Hall and Buffalo Chip Campground New GIS Technology and real-time connectivity to DOR's tax accounting system 5
"If you didn't pay Use tax is the same as sales tax 4% ... you owe 4%." - same rate - not in addition to the Senator Jeff Monroe, sales tax but due when sales tax has not January, 2016. been collected. Use tax is paid to the state by the 'user' when the appropriate sales tax was not collected. Online sales increased from 2014 to 2015 by approximately 14°/o resulting in an estimated loss of tax revenue of $31.8M to the State and $15.1 M to municipalities 6
• HB1001 authorized in-state and out-of-state wineries to ship wine directly to SD consumers As of January 14, 122 wineries have been licensed Wineries must obtain a license, remit both sales and alcohol taxes and file returns/pay taxes electronically 7
Audit Selection Description Methods Leads Invoices found in other audits, the ne ws, bu ildi ng permits, and construction contracts. This selection method identifies taxpayers with known issues instead of assumed issues detected using other selection methods. 1099-K The IRS shares information with us about a business's credit ca rd sales. This data is compared to a taxpayer's reporting to identify discrepancies. Past Producti ve Taxpayers with a large audit assessment who do not correct their reporting habits are Audits typically identified for a follow up audit of the tax periods immediately succeeding the first aud it. Po in ts Systems Each taxpayer license has points assigned to it based on activities indicat in g ri sk. The higher total number of points, the more likely there are issues with the license. Analytics Analytics are used to identify anomalies within an individual taxpayer's reporting. If a taxpayer's reporting has an unexpected change, they may be audited. Midwest Border The division receives quarterly reports from neighboring states of audits with States assessments greater than $25,000. If a taxpayer is thought to have a similar issue within our state, that license w il l be audited. Business Size The department routinely audits the 350 largest taxpayers in the state. 8
SOUTH DAKOTA LOnERY Did you know? The South Dakota Lottery provides money for things like education, highways and the environment. Every dollar earned is reinvested in South Dakota. South Dakotans are winning! Susan Nickle recently won $6.7M on a Hot Lotto ticket purchased at Johnson Siding in the Rapid City area. The South Dakota Lottery contributed $112 Mi llion to the State last year, second only to sales and use tax. q
• Effective July 1, 2015 • 6 Deadwood casinos offer the new games • 4 Craps Tables, 8 Roulette Wheels and 2 Keno games • Table Games Handle {dollars wagered) increased by 10.3% or $2.9 million in first 5 months (Jul-Nov) • Increase attributed to new games • Slot Machine Handle increased by 2.3% or $10.9 million • No Tribal Casinos are offering the new games as of January 2016 10
Questions? Prof essio11al . Dependable. Acco11111able .. . i11 partnership with South Dakota 11
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