Sales Use Tax
Who Needs A License?
Any service with a physical presence in South Dakota is needed to be licensed for sales taxation. Gross sales or transactions consist of the sale of concrete personal residential or commercial property, any items moved digitally, or services. The minimum thresholds noted below do not use to services with a physical existence in South Dakota. South Dakota law also needs any organization without a physical presence in South Dakota to get a South Dakota sales tax license and pay suitable sales tax if business fulfills the following criteria in the previous or existing fiscal year:
How To Get A License
- Register for a South Dakota sales tax license using the online Tax License Application.
- Register with several states through the Streamlined system at streamlinedsalestax.org.
Remote Sellers and Marketplace Providers
Remote Sellers
Remote sellers who fulfill particular limits should acquire a South Dakota sales tax license and pay relevant sales tax. (Per SDCL 10-64) *
A remote seller is a business without a physical existence in South Dakota that satisfies the following criteria in the previous or existing fiscal year:
- Your company's gross income from sales into South Dakota surpassed $100,000
* Gross sales or deals include the sale of tangible personal residential or commercial property, any products transferred electronically, or services.
Marketplace Providers
Marketplace service providers who satisfy a specific limit needs to get a South Dakota sales tax license and pay applicable sales tax (Per SDCL 10-65).
Who This Impacts
As of March 1, 2019, marketplace service providers have actually been required to license their service and remit appropriate sales tax on all sales it facilitates into South Dakota if:
- The market company is a remote seller; or
- The marketplace provider assists in the sales of a minimum of one marketplace seller that meets the remote seller criteria; or
- The marketplace service provider helps with the sales of 2 or more marketplace sellers that, when the sales are integrated, meets the remote seller criteria.
If business does not have a physical presence however has more than $100,000 in gross sales into South Dakota in the previous or present fiscal year, business is needed to license their company and remit relevant sales tax.
Additional Resources
Marketplace Tax Fact (PDF)
Remote Seller Bulletin (PDF)
Streamlined Sales Tax Remote Sellers Page
2023 Legislative Updates
Sales Tax Facts
Sales tax uses to the gross invoices of all retail sales, including the sale, lease or leasing of tangible individual residential or commercial property or any item moved digitally, and the sale of all services. Department of Revenue tax truth pages discuss how sales and use tax uses to each particular industry.
07/23
Exemptions from Sales Tax
There are four reasons that products and services would be exempt from South Dakota sales tax.
1. The purchaser is a tax exempt entity;
2. The product and services is specifically exempt from sales tax;
3. The purchaser sends a claim for exemption;
4. The item is provided to a point beyond the State of South Dakota.
Exempt Entities
State law excuses certain entities from paying South Dakota sales tax or use tax on their purchases. Relief agencies and spiritual and independent schools should use to the department and be authorized for exempt status. Their exemption number need to be consisted of on the exemption certificate. The exemption numbers for relief firms of an "RA"; personal schools include an "RS". For additional information about exempt entities, please review the Sales Tax Guide (PDF) and Exempt Entity Tax Fact (PDF). These entities consist of:
- United States government companies
- State of South Dakota
- Indian tribes
- Public or local corporations of the State of South Dakota
- Municipal or volunteer fire or ambulance departments
- Public schools, including K-12, universities and technical institutes that are supported by the State of South Dakota or public or community corporations of South Dakota.
- Non-profit health centers
- Relief agencies
- SD spiritual and private schools
Entities, listed above, that wish to request a sales & use tax exempt status might do so by sending an application to the Department. We have supplied a link listed below.
A non-profit charitable organization that commits its resources specifically to the relief of the poor, distressed or impoverished and have been recognized as an exempt company under 501( c )( 3) of the Internal Revenue Code might certify. Additional qualifications include an actual physical place in South Dakota and the entity need to be offering actual services. For extra details please see our Exempt Entity Tax Fact.
Relief Agencies that qualify are needed to restore their application every five years.
SALES TAX EXEMPT STATUS APPLICATION
A seller does not have to collect sales tax when a buyer provides a seller a completed exemption certificate at the time of sale. The buyer can provide a "single purchase" certificate for simply one transaction or a blanket certificate that applies to future purchases of qualifying exempt products. Exemption certificates do not end unless the information on the certificate changes; nevertheless, we advise updating exemption certificates every 3 to 4 years. For more information about exempt entities, please evaluate the Sales Tax Guide (PDF) and Exempt Entity Tax Fact (PDF). The exemption certificate is utilized to:
1. Claim exemption for:
2. Products or services meant to be resold; or
3. Products or services used for an exempt function.
4. Document that the purchaser is an exempt entity.
Exemption Certificate
What is Use Tax?
Use Tax is the equivalent of the South Dakota sales tax. The two taxes use to the sales of the same products and services, have the very same tax rates and have comparable laws. The distinction is in how the taxes are applied. Use tax uses when state and appropriate municipal sales tax has actually not been paid on products and services (including product or services transferred digitally) that are used, stored, or consumed in South Dakota. Situations happen when South Dakota sales tax might not have actually been charged and utilize tax is due consist of:
- When products are bought from an unlicensed out-of-state supplier;
- When untaxed retail stock is gotten rid of for personal or store use;
When an item acquired from an out-of-state supplier is provided in South Dakota, but the other state's tax is improperly charged; and
- When a purchase is made in another state then brought into South Dakota and the product was not taxed or was taxed at a lower tax rate than applies in South Dakota, you owe use tax.
Changes In Your Business? Let Us Know
If there are changes in your service please use our online types to send the modifications.
Cancel Your License
Sales or contractor's excise tax licenses are not transferable. A modification in ownership or legal company, such as from one sole owner to another, from sole proprietor to a collaboration, a modification from sole owner to a corporation, or a merger, requires a new tax license. You need to cancel your license within 15 days and instantly file a final return and pay all tax due if:
1. You close your company;
2. You offer your business; or
3. The ownership of the service changes.
How to Cancel Your License
If you submit digitally, you can cancel your license using our online Filing and Tax Payment portal. If you submit a paper return, please examine the out-of-business box in the upper right corner of your return, listing the last date of business.
Address Change
Notify the department in composing if your mailing address or your business location changes. Include the new address info, efficient date of the modification, your taxpayer number, and organization name.
How to Change Your Address
Please utilize our Change of Address Form to upgrade your address. If you file electronically, you can alter your address utilizing our online Filing and Tax Payment portal. If you file a paper return, you can likewise make the updates on your income tax return.
Change of Accounting
If your company changes your accounting method with the Irs you must send notification to the Department. You are qualified to begin reporting under your brand-new accounting approach the very first day of the following month. To alter your accounting method, please fill out our Change of Accounting Method kind. Businesses can report sales based on 2 different accounting approaches.
- When using the accrual technique, taxes should be paid on all sales made throughout the reporting period, even if you have actually not received payment. Uncollectable bills you write off as uncollectible in your books and records and are qualified to be deducted for federal earnings tax functions.
- When you use the money approach of accounting, you report gross invoices and pay tax as you receive payments. No bad financial obligations are permitted on the cash basis.
Sales Tax Statistical Reports
The most recent Sales Tax Statistical Reports are arranged in the expand/collapse regions at the bottom of this page. In all cases when you select a month, you will be seeing data put together from returns filed with the Department throughout that month. It might cover a variety of taxpayer filing durations, such as regular monthly, bi-monthly, semi-annually and so on. It includes returns submitted for the existing duration and those filed for previous periods. Historical Tax Statistical Reports are likewise offered.
Streamlined Sales Tax Project
The philosophy of the Streamlined Sales Tax Project is simple: the state and companies should collaborate to create simpler, more uniform sales and use tax systems.
Streamlined Sales Tax Registration System
To register, you may utilize the Streamlined Registration System. Alternatively, sellers might also utilize the Streamlined Sales Tax Registration System to establish a sales tax account with the 23 SSUTA member states in a single registration.
Register Now
Streamlined Sales Tax Useful Links
Streamlined Sales Tax FAQs
Rates & Boundary Database Instructions
Simplified Electronic Return
SD Information for Streamlined Sales Tax Participants (PDF).
- SD Tax Matrix Library of Definitions.
Tax Administration Practices
Sales & Use Tax Voluntary Disclosure Program
South Dakota's Voluntary Disclosure Program is created to assist organizations or individuals enter into compliance with South Dakota's sales and use tax laws. You can remain anonymous while examining whether this program is right for your company. However, if you decide to take part in the program, you will require to use in writing. If you currently have a South Dakota tax license for sales and use tax, you can not take part in this program.
Benefits of Participating
- Possible waiver of the penalty charges.
- Agreement that the Department will not pursue prosecution.
- Sixty days to figure out the liability and prepare the returns
Receiving Voluntary Disclosure
To qualify for a voluntary disclosure contract, you or your service:
- must not be currently signed up to gather and pay sales, usage, and contractor's excise tax in South Dakota,.
- Must not have actually gathered sales tax,.
- must not have actually been contacted by either the Department of Revenue or the Multistate Tax Commission to arrange an audit, or to finish a nexus survey,.
- are not under audit for any South Dakota tax,.
- are not presently under investigation by any police, and you are not presently the subject of a civil action or a prosecution involving the sales and utilize tax covered by the agreement,.
consent to sign up, file returns, and pay the tax due for the look-back period within the time frame defined in the contract,.
- will make records available for audit to validate the amount of your liability and the accuracy of your declarations upon request.
Application Process
Anyone can get in touch with the Department anonymously to learn more about the program. To remain confidential when making the official application, you might engage a representative, such as a tax preparer, accounting professional or attorney. Your request can be emailed to TDU@state.sd.us or sent by mail to the South Dakota Department of Revenue at 445 E. Capitol Ave Pierre, SD 57501.
Your written demand needs to consist of the following information:
1. A description of your activities and the date the activities began, consisting of whether you do any of the following: - own or lease residential or commercial property in the state.
- have staff members or independent sales agents obtaining sales in the state.
- have stock located in the state.
- make deliveries into the state and, if so, the means of transportation utilized
2. An estimate of the tax liability for previous tax periods.
3. A statement of whether you have gathered South Dakota taxes.
A declaration that you have not been contacted formerly by South Dakota or the Multistate Tax Commission Nexus Program.
You might find it beneficial to finish a voluntary disclosure with the Multistate Tax Commission if you have multiple states in which you need to sign up.
Multistate Disclosure Form
Business Education Program
Basic Sales Tax Seminar
These three-hour seminars are held in Sioux Falls, Rapid City, and Mitchell three to 4 different times throughout the year. Webinars will be held occasionally. Three CPE credits and/or 0.3 CEU credits are awarded for those who look for them and go to the complete seminar. Each workshop covers:
- How and when to get a tax license.
- Exemptions from sales and utilize taxes.
- Use tax.
- Municipal taxes.
- Purchases for resale.
- How to submit returns, both by paper and electronically
MN/SD Border Tax Seminars
A three-hour MN/SD Border Sales Tax Seminar and a three-hour ND/SD Border Construction Contractors Seminar are held two times a year in Sioux Falls, South Dakota. A total of 3.0 CPE credits and/or 0.3 CEU credits are granted for each seminar for those who apply for them and attend each whole seminar. If both workshops are participated in, an individual can earn 6.0 CPE credits and/or 0.6 CEU credits.
MN/SD Border Tax Seminar - Sales Tax
- Requirements to sign up in SD and MN.
- Awareness of significant distinctions in between South Dakota and Minnesota tax laws.
- How these differences might impact your organization.
- Practical suggestions on how to handle sales and utilize tax responsibilities for both states.
- Streamlined Sales Tax Project.
- Filing returns
MN/SD Border Tax Seminar - Construction Contractors
ND/SD Border Tax Seminars
A three-hour ND/SD Border Sales Tax Seminar and a two-hour ND/SD Border Construction Contractors Seminar are held twice a year, once in the spring in South Dakota and when in the fall in North Dakota. An overall of 3.0 CPE and/or.3 CEU credits are awarded for the Sales Tax workshop, and 2.0 CPE and/or.2 CEU credits are awarded to the Construction Contractors workshop if requested. If a specific participates in both workshops, or a complete day, 5.0 CPE and/or 0.5 CEU credits are granted.
ND/SD Border Tax Seminar - Sales Tax
- Requirements to register in SD and ND.
- Awareness of significant distinctions in between SD and ND tax laws.
- How the differences between state tax laws may impact your business.
- Practical tips on how to manage sales and use tax commitments for both states.
- Streamline Sales Tax Project.
- Available resources.
- Filing returns
ND/SD Border Tax Seminar - Construction Contractors
Topics include:
- Requirements for registration in SD and MN.
- Differences in between SD and MN taxes for contractors.
- Prime and subcontractors.
- Point of taxation.
- Special jurisdictions/tribal contracts.
- Owner furnished materials.
- Qualified utilities.
- Filing returns
Find Upcoming Seminars
Sales Tax Rate Charts
In the past, entrepreneur have asked if we could offer rate charts. For your convenience, we have actually put together charts for each of the current sales tax rates your business might require. The charts are available under or Forms/ Resources page. We have also provided a link listed below.