Valley Power Systems v. S.D. Department of RevenueAnnotate this Case
The Supreme Court affirmed the circuit court’s judgment affirming a certificate of assessment issued by the Department of Revenue requiring Valley Power Systems, Inc. to pay alternate contractor’s excise tax, use tax, interest, and a penalty.
Valley Power contracted with Black Hills Power, Inc. (BHP) to install new exhaust manifolds on five mobile power units that were used by a utility company to provide supplemental power at one of its power plants, but Valley Power did not pay any tax with respect to the transaction. Instead BHP paid use tax on the transaction. After an audit of both companies, the Department refunded BHP’s use tax and issued a certificate of assessment requiring Valley Power to pay $54,404. An administrative hearing examiner and the circuit court affirmed the assessment. The Supreme Court affirmed, holding that the Department did not err in concluding that Valley Power was required to pay excise and use tax.