Plaintiff has appealed from a judgment of the circuit court that affirmed a determination by the deputy commissioner of the South Dakota Department of Revenue that plaintiff owed some $12,809.72 in use taxes. We affirm.
Plaintiff is a South Dakota corporation engaged in the selling of heavy construction equipment within the State of South Dakota. It purchases new equipment from out of state manufacturers. Although plaintiff contends that it is not a leasing company and does not purchase equipment for the purpose of, leasing it, the record reveals that during the period covered by the audit conducted by the Department of Revenue plaintiff had. leased equipment to several counties and private contractors within the state. Some of the leases were oral; those in writing were on printed forms prepared by plaintiff.
The deputy commissioner found that the leases contained no written option to purchase the equipment described therein and that there was no evidence of such purchase agreements. At the hearing before the circuit court, plaintiff introduced form letters signed by representatives of the lessee counties and contractors to *153the effect that they had been advised at the time the lease agreements were entered into that the rentals could be applied towards purchase of the leased equipment.
Plaintiff’s sales manager testified that written options to purchase were not included in the written leases for two reasons: to enable plaintiff to recover from the bonding companies in those instances in which contractor lessees default on their obligations, and to accommodate those contractors who desire to charge off the rental payments on the equipment as expenses for income tax purposes. We note, as did the trial court in its memorandum opinion, that at least two of the printed leases in question contained a clause giving the lessee the option to apply a portion of the rentals towards the purchase price of the equipment. This clause had been lined through in ink on both of these leases.
The finding by the deputy commissioner that the leases contained no options, either written or oral, to purchase the equipment was not unsupported by substantial evidence on the whole record. The trial court correctly affirmed this finding. SDCL 1-26-36.
The deputy commissioner imposed the use tax on the leased equipment on the basis of SDCL 10-46-1(2) and SDCL 10-46-2.
SDCL 10-46-1(2) provides that:
“ ‘Use’ means and includes the exercise of right or power over tangible personal property incidental to the ownership of that property, except that it shall not include the sale of that property in the regular course of business.”
SDCL 10-46-2 provides that:
“An excise tax is hereby imposed on the privilege of the use, storage, and consumption in this state of tangible personal property purchased on or after July 1, 1939, for use in this state at the same rate of per cent of the purchase price of said property as is imposed by §§ 10-45-2 and 10-45-3 or amendment which may hereafter be made thereto.”
*154Plaintiff contends that the purpose of the use tax is to tax sales that cannot for constitutional reasons be taxed under the sales tax law. This purpose was recognized by the court in Northwestern National Bank of Sioux Falls v. Gillis, 82 S.D. 457, 148 N.W.2d 293, where it was stated that in addition to being a source of revenue, the use tax helps South Dakota retailers, who are subject to the sales tax, compete on an equal footing with out-of-state competitors.
Granting that the use tax complements and supplements the sales tax, Northwestern National Bank of Sioux Falls, supra, SDCL 10-46-1(2) and 10-46-2 do not by themselves grant an exemption to anyone bringing property into the state for use within the state.
We note that the legislature in 1973 added a section to the use tax law exempting the leasing of farm machinery from the use tax and subjecting the gross receipts from such leases to a tax at the same rate as the sales tax. SDCL 10-46-17.1. (Ch. 63, § 1, Laws of 1973). One can infer from this statute that the legislature recognized that the leasing of tangible personal property is a taxable event under the use tax law.1
Plaintiff’s argument that double taxation results from imposing the use tax upon the leased equipment and then imposing the sales tax upon the gross receipts from the subsequent sale of the equipment overlooks the fact that there were two separate transactions involved here. The first, the lease, subjected plaintiff to liability for the use tax. The second, the sale, resulted in the imposition of the sales tax, which plaintiff collected from the purchaser.2 Because the leases and the subsequent sales were separate, distinct transactions, the more so because of plaintiffs *155willingness to accede to the private contractors’ desire to cast the transactions into the form of leases, the exemption from the use tax provided by SDCL 10-46-6 does not apply, Cf. Pioneer Markets, Inc. v. Commissioner of Revenue, 85 S.D. 24, 176 N.W.2d 477.
Plaintiff relies heavily upon the case of Herman M. Brown Co. v. Johnson, 248 Iowa 1143, 82 N.W.2d 134. In that case, however, the court concluded that the heavy construction equipment had not been brought into the state for use in the state but rather had been purchased by the dealer for the purpose of selling it at retail. Moreover, the leases, both written and oral, entered into by the dealer and the lessees provided that the lessee could apply a percentage of the rentals against the purchase price of the equipment — in other words, the leases were lease-purchase contracts.
In the instant case, the record supports the finding that there was no lease-purchase option and that plaintiff was engaged in leasing the equipment in question. Had the leases contained a purchase option, the deputy commissioner, following the Department’s regulation, based upon the statutes, would have imposed the sales tax on the rental receipts as they were collected from the nongovernmental subdivision lessees. Because there were no such purchase options in the leases, and because the leasing of the equipment constituted a use of tangible personal property by plaintiff within the meaning of SDCL 10-46-1(2) and 10-46-2, the deputy commissioner was correct in imposing the use tax upon the transactions in question.
The judgment is affirmed.
DUNN, C. J., and WINANS and DOYLE, JJ., concur. COLER, J., dissents.. We note that the legislature in 1974 amended SDCL 10-45-5 to impose a tax on rentals of personal property: “There is hereby imposed a tax at the same rate as that imposed upon sales of tangible personal property in this state upon the gross receipts of any person from engaging or continuing in any of the following businesses or services in this state: * * * rentals of tangible personal property except mobile homes * * * ” SDCL 10-45-5, as amended by Ch. 100, Laws of 1974.
. If the sale was to a political subdivision of the state, no sales tax would be collectible. SDCL 10-45-10.