When the Sioux Falls Bicentennial Commission held celebrations and sold tickets to bicentennial events in 1975-76, did the proceeds from ticket sales have to bear South Dakota sales tax?
Plain-English summary
Senator Sheldon Songstad asked AG William Janklow whether the Sioux Falls Bicentennial Commission could rely on the SDCL 10-45-13 sales-tax exemption when it held bicentennial celebrations in 1975-76. The Commission had been formally appointed by the city of Sioux Falls and was recognized by the state-level bicentennial commission. All proceeds from its fundraising activities went out as grants to nonprofit bicentennial projects.
Janklow's short answer was yes. SDCL 10-45-13 exempted from sales tax the gross receipts from sales of tickets or admission to community-operated celebrations or shows sponsored by certain municipal nonprofit corporations or associations. The Bicentennial Commission's official appointment and its nonprofit grant-making structure fit the exemption, as long as the activities were within the scope of official nonprofit bicentennial activities.
Currency note
This opinion was issued in 1975. 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. SDCL 10-45-13 has been amended multiple times since 1975 and the specific scope of the community-celebration exemption may differ in modern practice.
What the opinion meant at the time
The 1976 bicentennial generated a wave of municipal celebration committees across the country. South Dakota cities organized special parades, exhibitions, fairs, and ticketed events. The question Janklow answered was practical: did these commissions have to collect sales tax on ticket sales, eating into the funds they could redistribute as grants?
Janklow's reading of SDCL 10-45-13 cleared the path for tax-free ticket sales as long as two conditions were met. First, the celebration had to be community-operated and sponsored by a municipal nonprofit corporation or association. Second, the proceeds had to flow to nonprofit purposes. The Sioux Falls Commission, with its official city appointment and its nonprofit-grant pipeline, met both.
The opinion did not address other tax obligations (federal income tax on the Commission's activities, property tax on any owned facilities, withholding obligations on employees), so commissions had to handle those separately.
Common questions
Q: Is this opinion still good law?
A: Not directly. SDCL 10-45-13 has been amended several times since 1975. The general principle, that ticketed community celebrations sponsored by municipal nonprofits can fall within a specific exemption, persists in some form, but the precise contours of the exemption today should be confirmed against current text.
Q: Did the exemption cover all sales by the Commission?
A: The opinion focused on "gross receipts from sales of tickets or admission." Sales of merchandise (T-shirts, programs, books) might or might not have fallen within the same exemption; the opinion did not directly address those.
Q: Did the Commission need separate state recognition?
A: The opinion notes the Sioux Falls Commission was "recognized by the state commission" (the state-level bicentennial coordinating body). That recognition supported the exemption's application but was not directly cited as a legal requirement.
Q: Could a private nonprofit running similar celebrations claim the same exemption?
A: Only if it qualified as a "municipal nonprofit corporation or association" sponsoring a community-operated celebration. A private nonprofit without municipal appointment would have a harder argument.
Background and statutory framework
South Dakota's sales-tax framework in SDCL Chapter 10-45 imposes tax on gross receipts from retail sales unless an exemption applies. SDCL 10-45-13, as it stood in 1975, exempted gross receipts from sales of tickets or admission to "community operated celebrations or shows sponsored by certain municipal nonprofit corporations or associations." The exemption fit the framework of community festivals, fairs, and similar civic events that municipalities formally organized through nonprofit entities to insulate the city from direct organizing responsibility while preserving access to tax-favored treatment.
The Sioux Falls Bicentennial Commission was the city's official bicentennial-coordinating body. Its operations met the textual elements of the exemption: municipal sponsorship (the city's official appointment) and nonprofit form (its activities funneled proceeds to grant-making rather than to private benefit). The AG's reading was a straightforward application of the statute to the facts.
Citations and references
Statutes:
- SDCL 10-45-13 (sales tax exemption for community-operated celebrations or shows by municipal nonprofit corporations or associations)
Cases: None cited.
Source
Original opinion text
March 5, 1975
Senator Sheldon Songstad
State Capitol Building
Pierre, South Dakota
OFFICIAL OPINION NO. 75-42
SDCL 10-45-13
Dear Senator Songstad:
You have requested an official opinion as to whether or not SDCL 10-45-13 would exempt the Sioux Falls Bicentennial Commission from the payment of sales tax on certain activities of that commission in support of the city's bicentennial projects.
You have stated that the Sioux Falls Bicentennial Commission was officially appointed by the city of Sioux Falls and is recognized by the state commission. You have further said that all proceeds from any efforts by this commission are distributed in the form of additional grants to nonprofit bicentennial projects.
It is my opinion that SDCL 10-45-13 does exempt from the provisions of the sales tax law gross receipts from sales of tickets or admission to community operated celebrations or shows sponsored by certain municipal nonprofit corporations or associations and that the activities you describe, so long as they are within the area of official nonprofit bicentennial activities are exempt.
Respectfully submitted,
WILLIAM J. JANKLOW
ATTORNEY GENERAL
WJJ:JD:rw