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Oh good morning welcome to the webinar on grocery industry tax and alcohol issues my name is Nathan Sanderson I'm the executive director of the South Dakota Retailers Association just a little bit about the retailer's association we've got almost 4,000 members throughout the state of South Dakota are also one of the oldest and largest state retail associations in the country in South Dakota we represent retailers and the legislative and regulatory process to provide information offer training for food service and alcohol licensees and provide members services including credit card processing business insurance data security and a variety of others as part of that service the subsequent Retailers Association also has an agreement with a labor law firm that allows our members to get answers to employment law questions from an attorney today's program again on the grocery industry tax and alcohol issues will feature presentations by Alex Ferrell and Marny Dooley of the South Dakota Department of Revenue Alex is going to go first and he's been an agent with the department for the last year in addition to assisting taxpayers of questions when they call his duties include working with tax discovery compliance licensing collections and reviews Marnie is the revenue section coordinator who's been with the Department for about 13 years Marnie works within the special taxes division and deals with Alcohol Tobacco and a number of other issues a couple of quick notes before we start the presentation on your screen you'll note that there's a note-taking version of the presentation that can be printed from the handouts area also the phones of all the attendees are muted so that we don't have any background noise we'll have a question and answer period following the conclusion of each portion of the presentation again Alex will go first we'll do a brief Q&A after he's finished and then we'll turn over to Marty if you would like to ask a question take a look at the panel on the side of your screen you may need to click the orange arrow to maximize that panel and then you can just type the message in the chat box and click send at the conclusion of each individual presentation I'll read the questions that have been submitted out loud and then Alex and Marnie will be available for the answers again to ask a question use the panel on the side of your screen click on the orange arrow to maximize that now I'll turn it over to Alex Farrell Thank You Nathan alright so this is the sales tax for grocery stores just a couple of things to go over really before we get started the information in this presentation does not cover every aspect of tax it does not alter or supersede any state statute or administrative regulation the information in this presentation does not carry regulatory or statutory authority and all users of this presentation are responsible for keeping informed about changes in tax laws and regulations by reading the Department of Revenue newsletters press releases tax packs and other documents published by the department so first off we have our sales tax in South Dakota the sales tax rate for the state is four and a half percent and it applies to the gross receipts for the sale lease or rental of tangible personal property that's any item that you can pick up hold products transferred electronically so any documents that you're sent that somebody prepared for you those are all subject to sales tax and services anything like accounting something where somebody's coming in they're not giving you a physical product but they're still doing work for you that's also subject to sales tax i'm construction services are not subject to sales tax they are subject to the contractors excise tax if somebody is working on your building that's a whole nother type of tax if you have questions about that you can certainly give the Department of Revenue a call then we have our city tax it's up to 2 per set most of the cities in South Dakota have the 2% city tax so generally speaking six and a half percent is the sales tax rate that you would be charging on anything that you're selling inside the state of South Dakota again it the city tax applies to all products and services subject to the state sales tax and it applies when the product is used stored or consumed to inside that city limits so if it's delivered to the customer or picked up inside city limits then the city would apply there may be additional tax due if you purchase the product and picked it up say outside the city limits and brought it inside city limits you may owe that additional tax as use tax and would more get into more of the use tax issues later on in the seminar and then these special and fairly narrow one is the municipal gross receipts tax it's an optional one percent which some cities have enacted it applies to the sale of alcoholic beverages applies to eating establishments doing prepared food I'm also applies to lodging and then the ticket sales or admissions to places of amusement movie theaters concerts things like that and we'll go through more of that later on in the presentation as well now the gross receipts this is what you put down on line one of your return it includes all of your taxable and non-taxable sales any special jurisdiction sales but sales on to any of the reservations in South Dakota you'll actually add in the value of any barters in the event that you happen to barter for something it does include delivery charges so shipping handling anything like that and it also includes reimbursable expenses except for accountants and attorneys again if you have questions about the reimbursable expenses contact the Department of Revenue it also includes your lottery receipts so you'll put it online one of the returned will do over lottery receipts laters how far as how we take care of those on the return for the rest of the way discounts coupons things like that when the manufacturer is going to reimburse you you don't deduct it before you calculate the tax so you charge you the tax on the full price of the item so in this example we have cake mix for two dollars and twenty five cents frosting for a dollar seventy-five assuming this grocery store is outside city limits the tax rate before and a half percent and so we take the 225 the dollar 75 for the frosting add those together and calculate the tax due I'm in this case it works out today 18 cents then we subtract the value of the coupon so we take off the 75 cents in this case for the manufacturers discount and the total do is 343 so anytime that you have to keep the coupon and make sure that you send it to the manufacturer so they pay you back you're going to charge tax on a full price of the item because you're getting paid for the full price of the item so sales tax is due on the full price of the item store coupons where you're not reimbursed on that discount is not subject to sales tax so you would go ahead and deduct the price of the coupon before you calculate the tax so here we have an example buy one get one free half gallon of ice cream is $5 the second one is also $5 we apply the two-for-one that's special and we take five dollars off of the total bill of the customer and we calculate the text on the $5 remaining which in this case works out to 23 cents you would report $5 on line 1 of your return and then just keep for your records that you sold the two ice cream with this two-for-one special already use text this is we get into a lot of the things that catch people by surprise um so the state and municipal use tax applies to any products and services used stored or consumed in South Dakota if sales tax was not paid on that item already so you'd have the four and a half percent state and city tax it be the same rate as if the vendor had it charged your sales tax I'm the big difference between sales tax and use tax you pay sales tax to the vendor and they send the money to us use tax the vendor didn't collect it so you send the money directly to us instead it's the same sales tax rate for the use tax um you would report it the month that you are invoiced when you receive the product or service or if you pull the item from your tax unpaid inventory so if you buy ten items for resale and you pull one of those items out of inventory to use it yourself you would owe the use tax on your cost of that item not necessarily what you would have charged the customer if you had sold it but on what you paid for that item um that also includes any shipping and handling charges that would have applied to that item if the product purchased is exempt from sales tax um there's a handful of items that are always exempt generally there are things like insulin for human use if you have questions about is this an exempt item or not again certainly call the Department of Revenue and we can help you out with that but if it's exempt from sales tax it would be exempt from use tax you will only ever Oh either the sales or the use tax on an item you would not owe both so if you paid sales tax when you bought it you don't only use tax on it as long as you paid the highest rate of use tax that would be do so if you paid six and a half percent when you purchased it there's nothing else do we'll go over a couple of situations where it may arise if you purchase an item from an out-of-state vendor I'm say you go up to Montana and you buy some shelving to use in your grocery store when you bring that shelf into South Dakota because Montana does not have a state sales tax you would owe the use tax on that when you bring it into the state items taken from inventory for your own use so if you have let's say you have a couple of bottles of Windex on your shelf for resale find that you've run out and you need to clean up something on a glove piece of glass you pull that out of inventory you owe the use tax on the value of that one bottle of Windex when you take it out of that inventory and that's again on your cost not the retail price that you would have charged to a customer on items purchased over the Internet there were a lot of vendors making sales over the internet that did not have a sales tax license if they don't charge your sales tax on whatever the item may be you would owe the use tax on that item the rental of equipment brought in from another state if you wind up renting banners or something from a company say in Montana where they don't charge your sales tax since you're using that equipment in South Dakota it would be subject to that South Dakota use tax promotional items things that are being given away because you're giving them away you would owe sales tax on the use value that you paid for them since you're not reselling them and then purchases made in another state brought in to South Dakota that either wasn't taxed or that was taxed at a lower rate so if you're making a purchase in another state and they charge you say three percent as the sales tax on that item when you bring it into South Dakota assuming you're in city limits you would owe an additional 3.5% to the tax paid on that item up to the six and a half percent that's due you don't owe another six and a half percent you just owe the difference so that the total tax paid on the item is six and a half percent and then supplies used in providing a service so if you have a cleaning staff um comes in cleaning company when they're purchasing their cleaning products to use in your store they would owe sales tax or use tax on that material as well some things that often get assessed use tax would be computers again if you buy them out of state don't pay sales tax on them they be subject to use tax donations um because you're not reselling that item it would be subject to use tax since you're the one who is using it to give away um so that's something that you really need to keep in mind if you're donating items you want to make sure that you're watching for the use tax on the value you paid for those items equipment leases demonstration and sample items so if you're giving away free samples you would owe the use tax on the value of those free samples that you're giving away office supplies tools snow removal services promotional gifts all of those things if they're not charging your sales tax then the use text would be do um if your own employees are doing the snow removal you don't owe use tax on your own employees labor but if you have another company come in um they should be dragging a sales tax if they don't then you would have that use tax liability meals furnished to employees if you have a restaurant deli anything in the grocery store and you let employees have free meals you would actually owe the use tax on the value of the food that they were given then again can counts like those donations you're giving the item away so it's subject to use tax and then equipment brought in from another state so purchases from out-of-state vendors be charged the sales tax based on your address um if you pick it up the sales tax rates same or more than in South Dakota you wouldn't owe any additional sales tax but again if it's if you paid less than the tax rate at your location you would owe that difference you do get credit for sales or use tax that's legally due and paid to another state if the other state provides for a light credit with South Dakota you have items taken from inventory again the use tax would be due when you take it out of the inventory if you take out of the inventory you use it as a demonstration item and you put it back you would owe the use text when you pull that out of inventory and there's no deduction for the use tax when you pay the sales tax or when the customer pays the sales tax to you at the end there all right you prepare the food this is one where I expect we're gonna have a lot of questions um so Nathan if we get a bunch of questions on what is and is not subject to this prepared food municipal gross receipts if you want to interrupt me with those questions certainly feel free okay so we have our prepared food so this is kind of a hot and fresh versus be taken bake if it's intended for immediate consumption it's been prepared and ready to go it would be subject to the municipal gross receipts tax so did you heat the food or drink did you mix or combine two or more ingredients to make one product and did you provide utensils if you did any of those things and the food is set for immediate consumption the municipal gross receipts tax that additional one percent so instead of having that 6.5% sales tax these items are subject to 7.5% if you're inside the city limits of a city that charges the municipal gross receipts tax so some food that's subject to it would be anything that's heated by the grocery store deli food that was made by the grocery store and things with utensils food not subject to the gross receipts tax some prepackaged by the manufacturer if you're just selling a premade sandwich it's not subject to gross receipts tax if you just slice meat or whatever other products and you're repackaging it it's not subject to the gross receipts tax and then food that requires further preparation by the purchaser such as heating or combining with other things is not subject to municipal gross receipts tax then we get into catering so if your grocery store does catering um you'd have that municipal gross receipts tax on the full receipt their cake is kind of an odd product cake that's delivered to a customer is catering it's subject to the municipal gross receipts tax but if it's picked up at the store its subject only to the state and city tax it's not subject to municipal gross receipts tax so the full cake a full pie or a full loaf of bread not subject to municipal gross receipts tax if you deliver it for catering it is and if you sell it by the slice it is subject to the municipal gross receipts tax so that's kind of an odd family of products there if you have questions we'll go through those and then you can always give us a call again at the Department of Revenue see if municipal gross receipts tax applies to whatever product it is you're questioning our containers you can purchase containers exempt from sales tax if you furnish them free of charge I mean it holds products that were sold to the customer containers that you reuse cannot be purchased for resale so th ngs that are containers would be boxes bags food wrappers cups things that aren't containers would be your napkin straws utensils reusable plates trays or baskets some of those things there in the yellow box are all subject to sales tax or use tax when you purchase or use them all right so it will give you a couple of minutes there to get some questions through on gross receipts and then we'll move on to the sales tax exemptions Alex we've got a couple of questions related to the topic you've just covered the first question related to municipal gross receipts taxes are hot beverages such as coffee or hot chocolate subject to municipal gross receipts tax they are that is both food and drink so a fountain pop is subject to municipal gross receipts tax a say a 20 ounce bottle is not because that's prepackaged by the manufacturer same for hot coffee hot chocolate those are intended for immediate consumption subject to the gross receipts tax ok very good now a question related to food so if I sell a prepackaged cold deli sandwich and somebody or a customer asked me to heat it up is that subject to the municipal gross receipts tax that's going to be depending on who puts it in the microwave okay if you have put it in the microwave then it's not exactly exactly if you have a microwave for the customer to use that's just out and available whether they heat it up or not you sold it to them cold if you put it in the microwave and sell it to them hot now it's prepared so it's subject to that gross receipts text ok very good I think those are the questions that we've got on this portion for now if there are any others maybe touch them at the end yeah we'll certainly catch them again at the end with the question-and-answer section there so we'll go on to the sales tax exemptions exemption certificates are used to claim an exemption for products or services that are intended to be resold so when the grocery store is purchasing the vast majority of the products that they buy they intend to resell them to customers so you owe the sales tax when the customer buys the product that when you get it from your vendor and if it's used for an exempt purchase there's a handful of those probably are gonna wind up applying to grocery stores um but if you have say a bunch of fertilizer five hundred pounds or more and a farmer wants to buy five hundred pounds from you they can purchase that exempt as part of the agriculture exemption it's probably not something that's going to come up for grocery stores very often and then you have purchases by an exempt entity exempt entities would be things like the federal state local government public schools things that are part of the government and have an exempt license tribal entities those are all exempt if you don't get an exemption certificate charging the sales tax you need to keep it in your records for at least three years that's our audit window so in the event that you are selected for an audit you want to make sure all of your records go back for that full audit window so you can provide all of the documentation the auditor is going to ask for you don't expire unless the information changes but we certainly recommend giving them up day to day and you will lead just to make sure the information remains the same and that you haven't accidentally thrown one out that you're still going to need and then if the purchasers from out of state and that state doesn't issue sales tax permits you can't accept their federal employer ID number driver's license number or a state issued ID number from that customer and then you just have to document on that invoice receipt sale that this was from an out-of-state customer making this purchase for an exempt resale use and their state doesn't issue those permits any business that comes to you and says yeah I want to buy this product exempt and they give you a license number that ends in u T or e t they cannot buy products for resale so you cannot accept those exemption certificates I'm u T is a use tax license that's generally given to a business that doesn't make retail sales subject to sales tax but you may have taxable purchases um you see that a lot in doctors offices dentists things where their product isn't subject to sales tax because it's healthcare but their products they are not exempt from sales tax when they make their purchases some exempt entities again governments federal state local public schools municipal or volunteer Fire ambulance departments tribal governments um non-profit hospitals and in some religious educational institutions non-profit accredited private institutions nonprofit charitable relief agencies that are recognized by the federal government and by the South Dakota Department of Revenue those entities there with the stars that you see they must be registered with us to have that exempt status so if they don't have a license but they tell you they're a school that's not a public school just a private educational school if they're not registered with us you would have to charge them the sales tax until they get registered with us and can properly fill out that exemption certificate for you churches are not exempt that comes up quite often everybody thinks like churches are exempt from taxes they're exempt from the federal income taxes they are not exempt from sales tax so if they're coming to you and say yeah we're the church and we'd like to purchase whatever it happens to be you're going to have to charge them sales tax most of the churches in South Dakota are aware of this every now and again they'll get new staff who aren't aware you can certainly send the person who says I'm with the church and we're exempt have them call us and we'll explain it to them send them to some of the documents that show that churches are subject to sales tax rather than you having to stand there and tell them no you're not and I'm not going to take that exemption certificate you can let us do that the snap exemption so this would be the food stamps the Supplemental Nutrition Assistance Program food that's purchased with snap fronts is exempt from the state sales tax so those snap vouchers and debit cards that are accepted like cash at most stores the rules on those they can only buy food or plants and seeds to grow food for home consumption if you have a discount coupon that's used in addition to snap funds manufacturer's coupons are still subject to sales tax so we'll sneak while they're with the manufacturer's coupon so a food stamp recipient purchases 11 dollars worth of food they have a $1 manufacturer's discount coupon and they have $10 in food stamps the sales tax is charged on that $1 worth of the manufacturer's coupon so the recipient would pay ten dollars and seven cents since the six and a half percent sales tax would apply to be one dollar coupon the ten dollars food stamps is exempt so that's one of those weird things to watch for with the food stamps if somebody's giving you a manufacturer's coupon and the total works out with the coupon and the food stamps you have to make sure you charge tax on the manufacturer's coupon there may be additional amounts due for you MD store coupons where you're just giving them a discount you wouldn't Oh any additional tax on that since you're not being reimbursed then we have our special jurisdictions and these are the tribal reservations we have tribes that have collection agreements with the state there are tribes that do not have collection agreements with the state and then there are a few tribes that have limited agreements with us and then we'll go over the reporting for the special jurisdictions so there are five Indian tribes that have collection agreements with us um it include sales use tourism contractors excise tax so the Cheyenne River Standing Rock Crow Creek of Walla and rosebud tribes all have the full agreements with us all businesses making sales or providing construction services subject to the same taxes tax rates and exemptions the tribes of limited tax agreements so the contractors excise tax and use tax is the Yankton Sioux and the sisseton-wahpeton those if you're making sales there it's always a good idea to contact us or contact the local tribal Department of Revenue so that you can figure out exactly what's due on any sales that you happen to be making there um we have no agreements with the Flandreau and the lower Brule tribes so sales of products delivered into Indian country without a collection agreement are just subject to the four and a half percent state sales tax sales by an enrolled tribal member on non agreement in country that's controlled by that members tribe are not subject to the state sales tax enrolled tribal member retailers are required to collect the four and a half percent state use tax on sales made to non-members of the tribe and they send those funds to the state this is what you'll see on your return so in the event that you're making sales into a reservation all of your sales again go online one that gross sales line of the return in this example there's a $500 non-taxable sale and a thousand dollars that was sold into one of those special jurisdictions so the state taxable amount we take our 6500 subtract the 509 taxable and we subtract these special jurisdiction sales so there's $5,000 subject to the state sales tax then we have the rosebud Sioux tribe in this case since that thousand dollars special jurisdiction sale occurred within the limits of that reservation that thousand dollar sales is subject to the 4.5% tax but that money gets sent back to the tribe instead of going to the state from your point of view you're going to send all of the money to us and we're going to distribute it this section tells us who gets what money so the city of mission apparently that was the city in the example where that thousand dollar sale happened city of mission has a 2% city tax and then the four and a half percent rosebud Sioux tribe tax and then two five thousand dollars apparently is all in here subject to the four and a half percent state and the two percent city tax and then you just go through and add up all of those taxes and send it all through us and we handle the sending the money to the cities the tribes all of that rather than have you filed with every city that you do business with we do have a tribal tax fact it's available on our website sales off of Indian country are taxable the state and city sales tax would apply if you're not on those special jurisdiction territories and then the tribes may also impose taro or Tetro taxes in addition to the sales tax so again if you're going to be doing business on those tribal jurisdictions you want to contact us contact the tribal Department of Revenue so that you can get specific details what you're going to be looking at for taxes when you're making those sales doing whatever work it is you're going to do there all right a couple of other miscellaneous things we have medicine so prescription drugs that are sold for human use um is not subject to sales or use tax if the drugs are prescribed dispensed or administered by a physician chiropractor optometrist podiatrist or an audiologist insulin for use by humans is exempt from sales tax whether it's sold with or without a prescription and then over-the-counter drugs without a prescription are subject to the four and a half percent state and applicable city tax so if you have somebody who comes in and they're going to buy over-the-counter aspirin because their doctor told them to and the doctor gave them the prescription even though it's an available over-the-counter drug because they have that prescription it would become exempt from sales tax anything that they're purchasing because you know we want to have some Advil at home that's subject to sales tax so it's a little more complicated than just the things that the public can pick up and buy without needing to talk to the pharmacist or subject to sales tax it's a little more complicated if they have that prescription from the doctor it would be exempt and you'll just need to make sure you document that the same way you would document all of your prescription drug sales delivery charges if you decide that you're going to be delivering products to your customers the delivery charges transportation shipping packaging handling all of those charges would be subject to the state and city tax when you deliver it to a customer these sales tax would then be based on the customers address so if you the grocery store are in city limits and you make a delivery to a customer who is outside the city limits because you delivered it to them outside city limits you would only charge them the four and a half percent sales tax if they come in and pick it up at your store they picked it up inside city limits and it's subject to that six and a half percent sales tax and then your delivery fee is going to be subject to whatever tax applies to the products that you're selling if the product isn't taxable so say you're delivering prescription drugs the delivery fee that you charge would then not be subject to tax because the prescription drugs are not subject to sales tax donations to individuals going to be subject to sales tax or use tax so again if you're taking it out of inventory to donate to somebody it's going to be subject to that use tax if you donate it to an exempt entity it's not subject to sales tax or use tax but you do need to make sure you get an exemption certificates to document that it was given to an exempt entity so if you donate it directly to the school the school will be able to give you an exemption certificate you wouldn't go the use tax on that if the PTA takes that donation the PTA is not the school they are subject to sales tax you would owe the use tax on whatever that donation is advertising if you hire an advertising agency and they do both prepare and place the advertisement it's exempt from sales tax if they make an advertisement and they give it to you it'd be subject to sales tax so if ad agency incorporated creates a commercial for greatest groceries an ad agency provides the commercials to the local broadcast station that would be exempt because they both made and placed in the media that advertisement so you wouldn't owe sales tax you wouldn't owe use tax on that transaction if they make the commercial they gave it to you and you take it to the media you put it on your website do whatever else you want to do with it it would be subject to sales tax sense the advertising agency did not do both so that's something to kind of watch out for is what's that advertising agency doing for you and who are they giving it to because that'll change whether their service is subject to sales tax direct sales tax are your Stax brochures Flyers and other printed materials again subject to the state and city sales tax if it applies lottery receipts again they're included in gross receipts so blind one of your returned you put all of the money that you received for those lottery sales included in there and then you deducted as non-taxable it goes down on line three you don't owe sales tax on the lottery sales you don't charge sales tax to the customer but you still report it through your return I already I think that concludes the sales tax portion and we have any other questions about sales tax that have come up yet yes Alex a couple of different areas and so to go back to the beginning on municipal girls receipts tax so the question is does a city have to charge municipal gross receipts tax on all of the items that were listed alcohol prepared food lodging ticket sales that kind of thing or no can a city charge that tax on just one or two or three of the items but it wouldn't be when the city implements the municipal gross receipts tax they can choose any of those categories if they select that category then the tax applies to anything in that category so they may decide that they want to only charge the municipal gross receipts tax on alcohol in that case all of your alcohol sales would be subject to municipal gross receipts but your prepared food wouldn't that be so they can pick and choose we do have a publication on our website it's the municipal tax information bulletin it gets updated twice a year and in there you can find all of the ci ies that have city sales tax and then next to that there's the municipal gross receipts and it will tell you item by item for those categories whether that city has municipal gross receipts tax that applies to that category okay very good well you used alcohol as an example and so we've got a question about that as well the question related to alcohol is can I or can a grocery store who's a retailer offer free samples of alcohol okay that's actually more of a question for Marnie I know we get into some restrictions on the alcohol and samples and things like that so Marnie are you available I am we can I say Marnie why don't we cover that one as we go through your portion okay that works at work okay we've got one least one other question for Alex the question is related to inventory so if I take an item out of inventory my inventory and donate it to a tax-exempt group do I still owe use tax on that no you're going to get an exemption certificate from them and it's just like if you had sold the item to them you just happen to be selling it to them for no price so you'll get that exemption certificate document that it was a donation so you still want to ring it through your register and zero it out so that you have a receipt to go with it and maybe make some notes on it that say donated to this exempt entity and you do not owe use tax on that item okay very good I think this is last question for you Alex and it's related to some of the prepared food products that we had talked about before okay if a customer asks a grocer to grind meat for them like a ham for instance but no other ingredients are added does municipal gross receipts tax apply no if you're just going to go ahead and grind that meat and it's not ready to be immediately consumed so if you're grinding hamburger you're not selling it with the attention that somebody's going to sit there and eat the raw hamburger right there on the spot you're just going to grind up the meat for them they're gonna take it home they're gonna finish cooking it mixing it with whatever else they're gonna do if you're just going to go ahead and grind that meat and repackage it for them it's not exact to that prepared food municipal gross receipts tax okay very good well we'll wrap up this portion and we'll move on to Marni I just remind everyone that if you have a question the chat box is there and available and Alex will be available at the end of the presentation as well to clean up any additional questions that we might not cover but with that I'll turn it over to Marni my name is Marni Dooley and I am in a special tax division and I am going to talk about some alcohol inquiries and one moment my question is can you all see my screen yep looks like they have you up alright thank you alright so moving on to with alcohol enquiries the first thing we're going to talk about is stocking shelves store employees can be eighteen to stock shelves manufacturers and wholesalers are prohibited from stocking shelves and that's also kind of falls into a little bit of the inducement and that is under admin rule sixty-four 75044 teen so many more questions I suggest reading the rule then coming and calling us talking about pricing know the pricing of alcohol can't be sold below the wholesale cost and that is what you buy from the wholesaler or the wholesale licensees and that is based off the South Dakota codified law 35 - 4 129 and then that is also you can't do like buy one get one free it's an inducement to buy but you can do it a discount as long as they're still paying that's at least the price that you paid for it and that again is under admin rule 60 470 500 414 alright and so the hours of operation we've gotten a lot of questions about this because the legislation has changed last year as of July 1st you can operate seven days a week 365 days a year from 7 a.m. to 2 a.m. however unless your local government makes an ordinance to restrict the hours or the days of sale such as they may say you can only sell on Sundays from 11 to 10 or that they may say you have to take Christmas off that is up to a local governing body the state says yes you may sell seven days a week 365 the age of the clerk of the Baker this is also a lot of questions we've been having and this has changed just a little bit - sorry one moment let me go back here okay so the age of the clerk in the bagger going off of South Dakota codified law 35 - 4 - 79 and 35 - 4 - semi 9.4 talks about whether you are 50 percent of girls sales of alcohol or non excuse me upset of gross sales is not from alcohol or if it is I suggest you as a retailer figure out what your girl sales is and go to that statute to see that you either fall under one or the other no one under the age of 18 may sell or serve alcohol and we also have the definition of serving alcohol as pulling a tab which I understand that grocery stores are not pouring it out but serving alcohol and ringing up the sale of alcohol nobody under the age of 18 may ring up the sale it has to be someone 18 or older and there still has to be someone who is 21 on the premises to be able for that 18 year old to do that the delivery of alcohol we had a few questions of this as well and with the delivery of the alcohol you have to have a package liquor license in order to be able to deliver alcohol which is the off sale liquor license and then you have to have the off sale delivery license which is one hundred and fifty dollars it does need to be purchased on at your location delivered later and then the employee must deliver it must be 21 and the person receiving the alcohol must be 21 and they must show the person delivering alcohol proof of age and that is under South Dakota codified law 35 - 4 127 and then purchasing alcohol is under South Dakota codified law 35 - 4 - 30 retailers are permitted to purchase our permit our retailers must purchase from wholesalers only we are having problems with retailers going to big-box stores and we consider a big-box stores such as Walmart Dakota Meyer excuse me at Walmart local grocery stores Sam's Club and Costco um they yes they do sell stuff at wholesale but they are not a wholesaler the wholesaler for alcohol it's a $5,000 license and those are the only ones who are allowed to buy so you can't have your local bar run to the grocery store to pick up alcohol for a wholesaler or from you you they have to buy it from a wholesaler and then one last question I was going to go to and talk about the sampling and sampling is South Dakota codified law 35 - 4 - 10 point - and that talks about excuse me I'm actually going to close my screen and I'm going to read it directly from legislative Research Council or excuse me from the legislature and it says austell licensees are permitted to provide free samples no additional license required they must have a packaged liquor license and they provide samples of malt beverage wine distilled spirits liqueurs or cordials in the general public without obtaining an additional license and the licensees can offer samples such as multi verage wine distilled spiritual coercion quarters and these licensees currently have in stock and is offering for sale to the general public you guys can read the rest you are able to offer samples if you have more questions about it please give me a call and here's my information my number six oh five seven seven three five four two four and that's my direct line and you can call me and ask me about it and I will also give you some administrative rules that we do have with sampling that follow with what you can offer and what you cannot offer so are there any other questions thanks Marnie this is Nathan again Marnie referenced a number of administrative rules and South Dakota codified laws those are available online at SD legislature dot gov she went to that website there to pull up South Dakota codified Lobby you can also get the administrative rules there as well SD legislature gov so we do have a couple of additional questions to Marnie and here's kind of a multi-faceted question dole discounts are allowed on alcohol but no inducements are allowed to purchase alcohol and we understand it so the question is is it legal to advertise that a cup if a customer buys X amount of groceries then they can get a discount on an alcohol purchase or vice versa if you buy X amount of whiskey for instance you can get a discount on a grocery store or a food purchase okay okay so buying X amount of groceries getting a discount on alcohol is actually an inducement however buying some alcohol and getting a free bag of chips you can say chips but you cannot say a brand label it cannot be a brand label has to be generic bag and you have to opportuni bag of chips or any company is what yeah right now okay so you can advertise that if a customer buys $100 worth of beer they can get you know a free bag of chips or something but they can't usually there usually is a coupon code I would rather talk individually on that one because depending because I don't want to say a general because sometimes there's certain stipulations with it I'm usually those do come from the manufacturers those coupons not from the general store so I can't it can't be a local store that that wants to do it it's usually the manufacturer that is having some type of from keep on our mail mail-in rebate and that's a whole new that's a whole new presentation so call us on us on that and we'll talk to you individually about each each stipulation is tough because it doesn't need to be advertised if there's price downs and stuff like that from the wholesalers and we have to actually okay that's okay all right that's all the Federals so yeah sure so let's talk a little bit about stocking alcohol on shelves can you briefly go over the age piece again and then specifically can the wholesaler the distributor stock beer for instance on the shelves for a grocer no okay so the age of 18 and the wholesaler cannot they can organize it if they're setting up a display but they cannot come in and stock the shelves that has to be the retailer that is doing that that isn't an inducement with the wholesaler to do that so the the employees of the of the grocery store the retailer need to be stocking the shelves they can the wholesaler can come in and they can like the salesman can straighten the shelves that they want to do it if they want to straighten some of their product out on the shelves but they cannot stock it okay an additional question we've got here is talk about the alcohol delivery again in conjunction with a grocery purchase and so if I for instance buy a hundred and fifty dollars worth of alcohol or is a grocer able to deliver that as if there is food delivered at the same time there's dollar thresholds talk about that a little bit okay so you have to buy at least one hundred and fifty dollars worth of alcohol in order for it to get delivered a lot of times we look at this as if a grocery store retailer is catering and they're delivering the cake and the food and the alcohol later then they can bring it in there their vehicle and deliver it and get it all set up with the sums up at a different location like if it's at a venue or even somebody's house but there has to be somebody there 20 or older to accept the alcohol oh if there is go ahead run there is no as far as I know there is no you have to buy a certain amount of food there was previous now it's just one hundred and fifty dollars without alcohol nice doesn't need to be purchased so just to be clear if I go to my local grocery store and I buy five thousand dollars worth of groceries and one bottle of whiskey for thirty dollars that would not be able to be delivered to my house correct correct the groceries can be delivered but the alcohol cannot because it's not a hundred fifty dollars worth and that local grocery store needs to have a package deliver license that does get accepted at the local level which is the city the cities are only allowed to have that counties are not allowed to have package delivery letter or package liquor licenses only retailers in in the city that's in the statute and so therefore only cities are allowed to issue the package delivery okay license as well all right well thank you Marnie thank you Alex Alex we didn't have any additional questions come in on sales tax piece just a note for everyone we've recorded this webinar and a link to the recording will be emailed by tomorrow to anyone who has registered for the program the retailer's Association has several additional webinars coming up presentations on the ballot issues for instance that you'll be voting on in the general election and for more information on the various webinars that we have available visit SDR a org that's WWSD ra org thank you to everyone for participating in today's program again if you have additional questions you can contact Alex or Marnie at the Department of Revenue directly and have a great day