A meat truck operator brings fresh meat to Mitchell one day a week, every week, for six months. He has paid the transient merchant license fee throughout. Now he wants to claim his business is permanent (and therefore not subject to the transient merchant statute). Does one day a week, repeated, qualify as 'permanent' under SDCL ch. 37-12?

Plain-English summary

A seller brought a fresh-meat truck to Mitchell for one day each week. He had paid the transient merchant license fee for six months and wanted to claim the business was permanent. The requester asked whether operating only one day a week could meet the permanency test in SDCL chapter 37-12.

The AG said the once-a-week schedule did not defeat permanent status, assuming the statutory tests in SDCL 37-12-1 and 37-12-3 were met. SDCL 37-12-1 said a business operated more than six months in one place by the same person would be deemed permanent. The AG referred to the merchant completing the required forms, paying fees and posting a bond for six months before being deemed permanent.

SDCL 37-12-3 required a verified statement with the county auditor from a person who had not complied with the transient merchant law before opening a new place of business. The opinion treated compliance with the statutory procedures as part of its conclusion about permanent status. It did not say that merely filing the statement eliminated transient status or fees on the first day.

The AG also noted the statute's prima facie presumption that a business commenced and discontinued within six months was temporary. He said proof of commencement and discontinuation could cause a business to be presumed temporary.

Currency note

This opinion applies the version of SDCL chapter 37-12 quoted at the time. Check current law and local licensing requirements before using it for a present business.

What the opinion meant at the time

For the Mitchell meat seller, visiting the same place only once a week did not itself prevent the business from being deemed permanent. The AG conditioned that answer on meeting the statutory tests and referred to forms, fees and bond over six months.

For county auditors, the opinion made the frequency point clear: a weekly schedule did not alone decide the classification. The merchant's compliance with the statutory procedures and length of operation at the same place also mattered.

Common questions

Q: Does the business have to open every day to be permanent?
A: No. The AG said one day a week did not defeat permanent status if the business met the statutory tests in SDCL 37-12-1 and 37-12-3.

Q: Does filing the verified statement make a new seller permanent on day one?
A: The opinion does not say so. It describes the six-month deeming rule and a merchant who had completed forms, paid fees and posted a bond for six months.

Q: Did the AG decide whether different locations around Mitchell count as one place?
A: No. The question assumed the seller returned to the same location. The opinion does not analyze moving among different locations.

Q: What happens if the business starts and stops within six months?
A: SDCL 37-12-1, as quoted by the AG, creates a prima facie presumption that a business commenced and discontinued within six months is temporary and its operator is a transient merchant.

Background and statutory framework

SDCL 37-12-1 defined a transient merchant and deemed a business permanent after it had operated more than six months in one place by the same person. It also set out a presumption for a business commenced and discontinued within six months. SDCL 37-12-3 addressed a verified statement filed with the county auditor when opening a new place of business, and said failure to file subjected the merchant to transient merchant provisions and penalties until six months of operation at that place. The AG read the provisions together and concluded that a weekly schedule did not defeat permanent status when the statutory requirements were met.

Citations and references

• SDCL chapter 37-12 (transient merchants)
• SDCL 37-12-1 (definition and six-month rule)
• SDCL 37-12-3 (verified statement)

Source

• Landing page: https://atg.sd.gov/OurOffice/OfficialOpinions/opinionhtml.aspx?id=850

Original opinion text

Definition of Transient Merchant

Dear Mr. Kiner:

You have requested an official opinion from this office in regard to the following factual situation:

FACTS:

A man brings a fresh meat truck to Mitchell on a weekly basis for a one-day period each week.

For the past six months, this individual has paid the temporary transient merchant license fee to the County Auditor. Under the Code, a business is presumed to be permanent when it has been in the same location for six months. The individual now wishes to claim that this business is permanent under the transient merchant statute.

Based on the above facts, you have asked the following question:

QUESTION:

Does one day a week in the same location on a permanent basis meet the definition of permanency under SDCL 37-12?

The following provisions of SDCL 37-12 apply to your problem.

SDCL 37-12-1 reads as follows:

A transient merchant is any person, firm, corporation, partnership, association, and agents of any of them transacting a temporary business where goods are exposed for wholesale or retail sale at any place in this state. A temporary business is one established for temporary operation only. A business operated more than six months in one place by the same person shall be deemed a permanent business, but one commenced and discontinued within six months thereafter shall prima facie be presumed a temporary business, and its operator a transient merchant.

SDCL 37-12-3 reads as follows:

Any person who has not complied with the provisions of the law relating to transient merchants, before opening a new place of business for sale of goods in any county, shall file with the county auditor of such county, a verified statement giving his name and address; character of the goods he intends to sell; location of the new place of business; and that the business is to be operated as a permanent business and not as a temporary business. The failure to file such statement shall subject any merchant upon opening a new place of business to all of the provisions and penalties of the statutes relating to transient merchants until he shall have continued said business at said place for six months.

SDCL Chapter 37-12 envisions a temporary business becoming a permanent business.

In my opinion the Legislature has provided a mechanism to be used to determine when a business is transient or when a business is permanent. If the merchant follows the procedures required in SDCL 37-12-3 then the last sentence of SDCL 37-12-1 reading as follows applies:

A business operated more than six months in one place by the same person shall be deemed a permanent business, but one commenced and discontinued within six months thereafter shall prima facie be presumed a temporary business, and its operator a transient merchant.

If the merchant has filled out the required forms, paid the fees and posted the bond for six months, it is my opinion the Legislature of this State has provided that the 'transient merchant' is 'deemed a permanent business.'

The fact that the 'permanent business' operates one day a week only does not defeat its status assuming the statutory tests of SDCL 37-12-1 and 37-12-3 are met. Should it be shown the business was 'commenced and discontinued' per SDCL 37-12-1, the business may be presumed 'temporary.'

Respectfully submitted,

Mark V. Meierhenry

Attorney General