State, Department of Revenue v. Sanborn Telephone Cooperative

MILLER, Justice.

In this appeal we hold that a telephone cooperative and its wholly owned subsidiary are liable for use tax on telephone directories and cable television guides purchased from out-of-state printers, but that the cooperative is not liable for service tax on reimbursements received from its subsidiary for various routine business expenses.

FACTS

The appellees are two entities, namely: Sanborn Telephone Cooperative (Sanborn), and Communication Enterprises Inc. (CEI). Sanborn provides telecommunication services to areas in south central South Dakota. CEI, a wholly owned subsidiary of…