The bill aims to repeal certain income modifications related to the bank franchise tax, specifically concerning bad debts. It amends several sections of the South Dakota law, including 10-1-47, 10-43-10.2, and 10-43-10.3. Notably, it removes references to bad debt deductions that exceed credits deemed worthless and charged off within the tax year, as well as any amounts received on account of bad debts previously charged off. Additionally, it modifies the definitions and conditions under which taxable income is calculated, including the treatment of dividends and capital gains from liquidating sales.

The amendments also clarify the treatment of dividends received from financial institutions and the deductibility of certain interest expenses. The bill introduces new language to specify the conditions under which capital losses and dividends are accounted for, while eliminating outdated provisions that no longer align with current tax practices. Overall, the legislation seeks to streamline the tax code for financial institutions by removing complexities associated with bad debt deductions and clarifying the tax implications of various income sources.

Statutes affected:
Introduced, 01/01/2026: 10-1-47, 10-43-10.2, 10-43-10.3