A serviceman stationed in South Dakota wants to register his car here. He bought it in his home state and paid sales tax there, but later moved to a state without sales tax and re-registered it there before being assigned to South Dakota. Does South Dakota's additional registration tax apply to him, or does the federal Soldiers and Sailors Civil Relief Act exempt him?
Plain-English summary
Pennington County (home to Ellsworth Air Force Base) saw a steady stream of military personnel coming through and trying to register their personal vehicles in South Dakota. The county treasurer had been applying the additional registration tax under SDC 1960 Supp. 44.0108(9), which was an extra charge tied to the vehicle's value, on top of the regular license fees. The treasurer asked the AG whether two U.S. Supreme Court cases (the Buzzard and Snapp cases) prevented the county from collecting the tax from servicemen.
The relevant federal law was Section 514 of the Soldiers and Sailors Civil Relief Act (now 50 U.S.C. Appendix Section 574), which exempted non-resident servicemen from certain taxes in their state of assignment. A predecessor AG had ruled in 1943-44 AGR 455 that the federal protection applied to South Dakota servicemen: if a serviceman had already paid the equivalent fee or tax in his state of residence/domicile, South Dakota could not charge him for the license in South Dakota.
The complication was the U.S. Supreme Court's 1966 decision in California v. Buzard, 382 U.S. 386. California had two separate taxes on motor vehicles: a flat $8 license fee, and an ad valorem property tax of 2% of the vehicle's value. The Supreme Court held that the 2% tax was not essential to registration or licensing (it was an ad valorem property tax dressed up as a registration component), so the serviceman was exempt from it under the federal act.
The question for South Dakota was whether SDC 44.0108(9)'s "additional" registration fee was more like California's $8 flat fee (which servicemen could be charged) or more like California's 2% ad valorem tax (which they could not). The AG concluded it was the former. SDC 44.0108(9) was a true registration tax, essential to registering the vehicle in South Dakota: the rate was set at the same rate as SDC 57.3201 (the sales tax rate), but the structure was as a registration fee, not as a property tax assessed annually. So the Buzard exemption did not apply.
That left the credit question. If the serviceman had already paid a similar additional registration tax to another state (when registering the same vehicle there), South Dakota would give credit for that amount. The serviceman would only owe the difference, if any, in South Dakota. This credit followed the structure already built into SDC 44.0108(9) (as amended by Ch. 129 SL 1966), which applied to all non-residents, not just servicemen.
The AG also confirmed the predecessor's 1943-44 opinion: a serviceman whose vehicle was already licensed in his home state (with the equivalent tax paid there) could not be required to also pay the license in South Dakota. The federal act protected him on that point.
Currency note
This opinion was issued in 1968. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The Soldiers and Sailors Civil Relief Act has been replaced by the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. ch. 50, with significantly updated tax protections. South Dakota's motor vehicle registration tax structure has been recodified into modern SDCL Title 32 (Motor Vehicles), and the rate structure has changed multiple times. Military members registering vehicles in South Dakota today should consult current SDCL provisions, the Department of Revenue, and SCRA-knowledgeable base legal assistance.
What the opinion meant at the time
For county treasurers handling motor vehicle registrations at the counter, the opinion gave them a clear rule: charge the SDC 44.0108(9) additional tax to servicemen who chose to register in South Dakota, but credit any equivalent tax the serviceman had already paid to another state for the same vehicle. Reject any attempt to invoke Buzard to escape the tax entirely. But also respect the federal exemption: if the serviceman's vehicle was already licensed in his home state with the equivalent tax paid there, he could keep that home-state registration and not register in South Dakota at all.
For military personnel stationed in South Dakota, the opinion clarified their options. If their home state already had their vehicle registered with an equivalent tax paid, they could keep that registration and drive on it in South Dakota under the federal act's protection. If they wanted to (or had to) register in South Dakota, they would owe the additional registration tax, but would get credit for any similar tax paid in another state for the same vehicle.
For Pennington County and Ellsworth AFB legal officers, the opinion's nuances were important. Servicemen who had paid sales tax in their home state but later moved to a no-sales-tax state would not get credit for the sales tax against SDC 44.0108(9), because sales tax and registration tax were different. The credit applied only against similar registration-type taxes paid elsewhere.
For the state's revenue stream, the opinion preserved the additional registration tax as a meaningful source of revenue from the military population. Without the AG's reading, every serviceman could have invoked Buzard to escape the tax entirely; with the AG's reading, the tax stuck.
Common questions
Q: What was the rate of the additional registration tax?
A: SDC 44.0108(9) set the rate at the same rate as SDC 57.3201 (the sales tax rate). The exact percentage at the time would have been the 1966-amended sales tax rate. The opinion did not quote the percentage.
Q: Did the AG's reasoning depend on calling the tax a "registration fee" rather than a "tax"?
A: Partly. The Buzard analysis turned on whether the charge was essential to registration (in which case servicemen could be charged) or an independent ad valorem tax (in which case they could not). SDC 44.0108(9) was structured as a registration-essential charge, and the AG read that structure as controlling.
Q: Could the serviceman avoid the South Dakota tax by keeping his vehicle registered in his home state?
A: Yes, if the home state's registration was current and the serviceman had paid the equivalent tax there. The Soldiers and Sailors Civil Relief Act protected him from being forced to re-register in his state of assignment.
Q: What if the home state had no equivalent additional registration tax?
A: The serviceman could still keep the home state registration. The federal act protected him from forced re-registration in the state of assignment, regardless of the home state's tax structure. But if he chose to register in South Dakota voluntarily, he would owe the South Dakota tax without offset.
Q: Why did the AG distinguish between sales tax and additional registration tax?
A: Sales tax was a one-time event at the point of purchase. Additional registration tax was assessed at each first or original registration of the vehicle in South Dakota. The two were different events with different incidence, even if calculated at the same rate. The AG treated them as separate taxes for credit purposes.
Q: Did the credit apply at every subsequent registration, or only at the first South Dakota registration?
A: The opinion read the statute as saying the additional registration tax could not be required again on a vehicle for which it had already been paid in South Dakota, regardless of how many other states it had been registered in between. Once paid to South Dakota, paid forever for that vehicle.
Q: What if the serviceman bought a new vehicle while stationed in South Dakota?
A: A new vehicle would be a new "first or original registration." The serviceman would owe the additional registration tax on the new vehicle. If he had already paid an equivalent tax in another state for the same new vehicle (perhaps because he bought it elsewhere first), he would get credit for that.
Background and statutory framework
South Dakota's motor vehicle tax structure in the 1960s had two main components: ordinary license fees (set by weight or value) and an additional registration tax tied to the vehicle's value at first registration. SDC 1960 Supp. 44.0108(9), as last amended by Chapter 129 of the 1966 Session Laws, fixed the additional tax at the same rate as the state sales tax under SDC 57.3201.
The "additional" registration tax was the legislature's way of capturing some of the value of a vehicle as it entered the South Dakota registration system. It worked roughly like a sales tax on out-of-state-purchased vehicles entering the state for the first time, but it was structured as a registration component rather than as a true sales tax. That structural choice mattered for both interstate-commerce reasons and for the Buzard analysis.
The Soldiers and Sailors Civil Relief Act, Section 514 (now codified as 50 U.S.C. Appendix Section 574 in the version current to the opinion), exempted non-resident servicemen from various forms of state taxation tied to their physical presence in the state of assignment. The protection was meant to keep servicemen from being subjected to dual taxation by their home state and their state of assignment.
The U.S. Supreme Court's Buzard decision in 1966 gave the act's protection real teeth on motor vehicle taxes. The Court held that California could not charge its 2% ad valorem motor vehicle tax to a serviceman because the tax was not essential to registration (it was a property tax separately collected at registration time). The opinion left intact the proposition that registration fees genuinely essential to obtaining the license could be charged.
The AG's job was to apply Buzard to South Dakota's hybrid scheme. The AG concluded that 44.0108(9), although calculated at the sales tax rate, functioned as a true registration fee: it had to be paid to obtain the registration, it was paid once at first registration rather than annually, and it was integrated with the registration process rather than a separate property tax. So the Buzard exemption did not apply, and South Dakota could collect it from servicemen who chose to register here. The credit-for-equivalent-tax-paid-elsewhere provision in the statute itself softened the bite.
Citations and references
Statutes:
- SDC 1960 Supp. 44.0108(9) (as last amended by Chapter 129 of the Session Laws of 1966) (additional registration tax at sales tax rate; credit for equivalent tax paid elsewhere)
- SDC 1960 Supp. 57.3201 (sales tax rate, which set the additional registration tax rate by reference)
- SDC 1960 Supp. 41.0108(9) (parallel provision referenced for the registration-essential nature of the additional tax)
- Soldiers and Sailors Civil Relief Act, Section 514, 50 U.S.C. Appendix Section 574 (federal exemption for non-resident servicemen from certain state taxes)
Cases:
- California v. Lyman E. Buzard, 382 U.S. 386, 15 L. Ed. 2d 436 (1966) (California ad valorem motor vehicle tax not essential to registration; serviceman exempt under SSCRA)
Prior AG opinions:
- 1943-44 AGR 455 (Soldiers and Sailors Civil Relief Act protects servicemen from forced re-licensing of vehicles already licensed in home state)
Source
Original opinion text
Motor Vehicles. Liability of members of the Armed Services for additional registration tax for motor vehicles.
You have requested an opinion of this office based upon the following factual situation:
"Pennington County, South Dakota, has a great number of military personnel residing within its jurisdictional confines. A number of persons so stated annually attempt to register and license their motor vehicles in the State of South Dakota. In many cases, when vehicles are originally purchased, the individual pays a sales tax upon the vehicle but is then transferred to a state which has no sales tax upon motor vehicles. After re-registering the vehicle in the state where no sales tax is charged, the individual is then transferred to South Dakota. Upon application for registration and licensing, it has been the policy of the treasurer of Pennington County to again assess to such an individual a sales tax on said automobile or motor vehicle based upon the vehicle's present market value."
You asked the following specific question:
"The question thus presented by these facts is whether or not in the opinion of the Attorney General, the Buzzard and Snapp cases are of such a nature and quality as to preclude the Treasurer of Pennington County from imposing motor vehicle taxes as are required by the State of South Dakota?"
Under the provisions of SDC 1960 Supp. 44.0108(9), it is provided that in addition to any and all other license fees, registration fees, and compensation for the use of the highways, there shall be paid to the County Treasurer upon application for the first or original registration, of a motor vehicle an additional and further license fee at the same rate of tax as provided in SDC 1960 Supp. 57.3201.
Under the provision of the above cited statute, I am of the opinion that once the additional registration fee has been paid to South Dakota upon a motor vehicle registered in this State, that such fee cannot again be required upon that particular motor vehicle regardless of how many states it has been licensed in subsequent to the payment of the additional registration fee in this State and the time of the application for a second registration in this State.
The Soldiers and Sailors Civil Relief Act, Section 514 (50 USC Appendix Section 574) is the federal provision excepting non-resident servicemen from certain taxes in the state in which he is assigned. One of my predecessors issued an opinion that the federal law was applicable to members of the military and naval personnel stationed within the State of South Dakota and using private motor vehicles upon the public highways of this State, to the extent that, if the vehicle is licensed, or the fee or excise fee or excise tax paid in the state where the operator thereof is a resident or domicile, he cannot be required to pay for a license in this State for the operation of such car upon the public highway. 1943-44 AGR 455.
In the case of California v. Lyman E. Buzard, 382 US 386, 15 L Ed 2d 436, the law of California was construed. Under the motor vehicle code of California, the license for a motor vehicle is fixed at $8.00. Under the provisions of the Revenue Code of California, there is assessed an ad valorem tax in the amount of 2% of the value of the motor vehicle. This tax is assessed each year. In Buzard it was held that the California 2% tax was not imposed as a tax essential to the registration and licensing of the serviceman's motor vehicle. It being an ad valorem tax, the serviceman was not required to pay it.
Under the South Dakota law, SDC 1960 Supp. 41.0108(9) the additional tax imposed is essential to the registration and licensing of the serviceman's motor vehicle. Any person, resident or non-resident, who wishes to operate a motor vehicle upon the highways of this State, must pay such tax in order to register it. I am, therefore, of the opinion that if a non-resident serviceman elects to register his motor vehicle in the State of South Dakota and license it therein, he must pay the additional registration in this State in the same manner and to the same extent that any non-resident who brings a motor vehicle into this State and seeks to license it herein. That is to say, that if such motor vehicle was licensed in another state which required the payment of a tax similar to that required in South Dakota as a condition precedent to obtaining registration of such motor vehicle, by virtue of SDC 1960 Supp. 44.0108 (9) as last amended by Chapter 129 of the Session Laws of 1966, such serviceman would be exempt from paying the South Dakota tax in question to the amount so paid in such foreign state.