It seems that about the time I think I have this tax figured out a new scenario comes along and I am researching it once more. I finally had it explained to me in a way that made sense. This is a Contractors tax. If a contractor performs work – it is going to be excise taxable. There are no exceptions as to who the customer is, even if it is a government entity. If the work is performed in South Dakota it is excise taxable. The only time you would not pay excise tax is if you are a sub-contractor and the prime contractor is paying the tax. (Be sure and have the prime contractor complete SD EForm 1346 – Prime Contractors’ Exemption Certificate). Qualified Utility Projects do not fall under this classification. Prime contractors cannot issue exemption certificates for these jobs so the sub-contractor would be responsible for reporting and paying their own excise tax. Just remember, someone always has to pay the excise tax.