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26.591.9 101st Legislative Session 1128
2026 South Dakota Legislature
House Bill 1128
Introduced by: Representative Rice
Underscores indicate new language.
Overstrikes indicate deleted language.
An Act to exempt certain nonresident military personnel from payment of motor 1
vehicle excise tax. 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF SOUTH DAKOTA: 3
Section 1. That § 32-5B-2 be AMENDED: 4
32-5B-2. Motor vehicles exempted from the provisions of this chapter are as 5
follows: 6
(1) Any motor vehicle exempted in § 32-5-1.3, 32-5-42, 32-5-42.1, or 32-5-42.2; 7
(2) Any motor vehicle acquired by inheritance from or bequest of a decedent; 8
(3) Any motor vehicle previously titled or licensed jointly in the names of two or more 9
persons and subsequently transferred without consideration to one or more of such 10
the persons; 11
(4) Any motor vehicle transferred without consideration between spouses, between a 12
parent and child, and between siblings; 13
(5) Any motor vehicle transferred pursuant to any mergers or consolidations of 14
corporations or limited liability companies consolidation or merger of a corporation 15
or limited liability company, or plans of reorganization by which substantially all of 16
the assets of a corporation or limited liability company are transferred, if the motor 17
vehicle was previously titled, licensed, and registered in this state; 18
(6) Any motor vehicle transferred by a subsidiary corporation or limited liability 19
company to its parent corporation or limited liability company for no or nominal 20
consideration, or in sole consideration of the cancellation or surrender of the 21
subsidiary's stock if, provided that the motor vehicle was previously titled, licensed, 22
and registered in this state; 23
(7) Any motor vehicle transferred: 24
(a) Transferred between an: 25
26.591.9 2 1128
Underscores indicate new language.
Overstrikes indicate deleted language.
(i) An individual and a corporation , if the individual and the owner of 1
the majority of the capital stock of the corporation are one and the 2
same, or any motor vehicle transferred between an; or 3
(ii) An individual and a limited liability company, if the individual and the 4
majority member of the limited liability company are one and the 5
same, and if the motor vehicle; and 6
(b) Which was previously titled, licensed, and registered in this state; 7
(8) Any motor vehicle transferred between a corporation or limited liability company 8
and its stockholders, members, or creditors if to: 9
(a) To effectuate a dissolution of the corporation or limited liability company, it 10
is necessary to transfer the title from the corporate entity or limited liability 11
company to the stockholders, members, or creditors; and if the 12
(b) The motor vehicle was previously titled, licensed, and registered in this 13
state; 14
(9) Any motor vehicle transferred between an individual and a limited or general 15
partnership if the: 16
(a) The individual and the owner of the majority interest in the partnership are 17
one and the same person; and if the 18
(b) The motor vehicle was previously titled, licensed, and registered in this 19
state; 20
(10) Any motor vehicle transferred to effect effectuate a sale of all or substantially all 21
of the assets of the business entity , if the motor vehicle was previously titled, 22
licensed, and registered in this state; 23
(11) Any motor vehicle acquired by a secured party or lien holder in satisfaction of a 24
debt; 25
(12) Any motor vehicle sold or transferred that, which is eleven or more model years 26
old and that is sold or transferred for two thousand five hundred dollars or less 27
before trade-in; 28
(13) Any damaged motor vehicle transferred to an insurance company in the settlement 29
of an insurance claim; 30
(14) Any motor vehicle owned by a former resident of this state who returns to the state 31
and who had previously paid vehicle excise tax to this state on the motor vehicle , 32
as evidenced within the department's records or by submission of other acceptable 33
proof of payment of such the tax; 34
26.591.9 3 1128
Underscores indicate new language.
Overstrikes indicate deleted language.
(15) Any motor vehicle transferred between corporations, both subsidiary and 1
nonsubsidiary, if the: 2
(a) The individuals who hold a majority of stock in the first corporation also 3
hold a majority of stock in the second corporation ; but these, except that 4
the individuals need not hold the same ratio of stock in both corporations , 5
and if the 6
(b) The motor vehicle was previously titled, licensed, and registered in this 7
state; 8
(16) Any motor vehicle transferred between limited liability companies, both subsidiary 9
and nonsubsidiary, if the: 10
(a) The individuals who hold a majority interest in the first limited liability 11
company also hold a majority interest in the second limited liability 12
company; and if the 13
(b) The motor vehicle was previously titled, licensed, and registered in this 14
state; 15
(17) Any motor vehicle transferred by a trustor to a trustee or from a trustee to a 16
beneficiary of a trust; 17
(18) Any motor vehicle rented for twenty-eight days or less, which is subject to the tax 18
imposed by § 32-5B-20; 19
(19) Any motor vehicle transferred without consideration to any South Dakota nonprofit 20
organization that is in this state, which: 21
(a) Is exempt under 26 U.S.C. § 501(c)(3) of the Internal Revenue Code and 22
that will donate (January 1, 2026); and 23
(b) Donates the motor vehicle to a needy family or individual; and 24
(20) Any motor vehicle transferred without consideration to any South Dakota nonprofit 25
organization that is in this state, which: 26
(a) Is exempt under 26 U.S.C. § 501 (c)(3) of the Internal Revenue Code and 27
that sells (January 1, 2026); and 28
(b) Sells the motor vehicle within forty-five days of the transfer; and 29
(21) Any motor vehicle owned by nonresident military personnel, as described in § 32-30
5-47.1, who: 31
(a) Is a legal resident of a state other than this state; and 32
(b) Maintains current registration of the motor vehicle in the other state. 33