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South Dakota

TITLE X

CABLE

Chapter 10.16     Payment to the City

10.1601     Annual Percentages

During the term of the franchise granted hereunder and so long as Grantee or its successors or assigns operate the Cable Television System, commencing from the date of institution of service to subscribers, Grantee shall pay to the City Annually three percent (3%) of the “annual gross subscriber revenue” as defined herein, of said Cable Television System as compensation for the said franchise.

10.1602     Gross Subscriber Revenues

Gross subscriber revenues shall include those revenues derived from the monthly service charge paid by subscribers for basic Cable Television reception service. Subscriber revenues shall not include any state or federal taxes relating to services provided by or fees charged by the Grantee, or revenues received as installation charges and fees for reconnections, inspection, repairs or modifications of any installation.

10.1603     Taxes on Payments

Such payments by Grantee to City shall be in lieu of any occupation tax, license tax, or similar levy, and shall be paid annually. Nothing Herein contained, however, shall in any way relieve Grantee or its assigns or successors from the obligation of paying property taxes to the City of Scotland or any other governmental subdivision of the State of South Dakota or any other taxes lawfully levied by the State of South Dakota on the operation of the Grantee. Such payment also does not affect the responsibility of the Grantee to collect state and local sales tax on the service provided.

10.1604     Filing Statement

The Grantee shall file with the City, within ninety (90) days after the expiration of any fiscal year of Grantee during the term of the rights granted hereunder, a statement prepared by a Certified Public Accountant showing the gross subscriber revenue as defined herein. It shall be the duty of the Grantee to pay to the City within fifteen (15) days after the time for filing such statement, the amount due for the fiscal year covered by such statement. In no event shall any such payment be due and payable until the system is actually in operation with paying subscribers. Grantee shall file with the City, within ninety (90) days after the expiration of any fiscal year of Grantee during the term of the rights granted hereunder, a statement prepared by a Certified Public Accountant showing the gross subscriber revenue as defined herein. It shall be the duty of Grantee to pay to the City within fifteen (15) days after the time for filing such statement, the amount due for the fiscal year covered by such statement. In no event shall any such payments be due and payable until the system is actually in operation with paying subscribers.