Who Needs A License?
Any business with a physical presence in South Dakota is needed to be certified for sales tax collection. Gross sales or transactions include the sale of concrete personal residential or commercial property, any items transferred digitally, or services. The minimum limits listed below do not apply to services with a physical existence in South Dakota. South Dakota law likewise requires any company without a physical existence in South Dakota to obtain a South Dakota sales tax license and pay applicable sales tax if business satisfies the following requirements in the previous or existing calendar year:
How To Get A License
- Register for a South Dakota sales tax license using the online Tax License Application.
- Register with numerous states through the Streamlined system at streamlinedsalestax.org.
Remote Sellers and Marketplace Providers
Remote Sellers
Remote sellers who meet specific limits should get a South Dakota sales tax license and pay appropriate 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 current calendar year:
- Your organization's gross revenue from sales into South Dakota went beyond $100,000
* Gross sales or transactions include the sale of concrete personal residential or commercial property, any products moved electronically, or services.
Marketplace Providers
Marketplace suppliers who meet a particular limit must obtain a South Dakota sales tax license and pay appropriate sales tax (Per SDCL 10-65).
Who This Impacts
Since March 1, 2019, market providers have been required to license their company and remit applicable sales tax on all sales it assists in into South Dakota if:
- The market provider is a remote seller; or
- The marketplace provider helps with the sales of at least one marketplace seller that meets the remote seller criteria; or
- The marketplace provider assists in the sales of 2 or more market sellers that, when the sales are integrated, meets the remote seller criteria.
If the service does not have a physical presence however has more than $100,000 in gross sales into South Dakota in the previous or current fiscal year, the business is required to accredit their company and remit appropriate 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 applies to the gross invoices of all retail sales, consisting of the sale, lease or rental of tangible personal residential or commercial property or any product transferred electronically, and the sale of all services. Department of Revenue tax fact pages explain how sales and use tax uses to each particular market.
07/23
Exemptions from Sales Tax
There are four factors that products and services would be exempt from South Dakota sales tax.
1. The buyer is a tax exempt entity;
2. The product and services is specifically exempt from sales tax;
3. The purchaser submits a claim for exemption;
4. The product is delivered to a point outside of the State of South Dakota.
Exempt Entities
State law exempts particular entities from paying South Dakota sales tax or use tax on their purchases. Relief firms and religious and personal schools must apply to the department and be approved for exempt status. Their exemption number must be consisted of on the exemption certificate. The exemption numbers for relief agencies consist of an "RA"; personal schools include an "RS". For more details about exempt entities, please evaluate the Sales Tax Guide (PDF) and Exempt Entity Tax Fact (PDF). These entities include:
- United States federal government agencies
- State of South Dakota
- Indian tribes
- Public or community corporations of the State of South Dakota
- Municipal or volunteer fire or ambulance departments
- Public schools, consisting of K-12, universities and technical institutes that are supported by the State of South Dakota or public or local corporations of South Dakota.
- Non-profit medical facilities
- Relief companies
- SD spiritual and independent schools
Entities, listed above, that desire to make an application for a sales & utilize tax exempt status may do so by sending an application to the Department. We have offered a link listed below.
A non-profit charitable organization that commits its resources specifically to the relief of the bad, distressed or underprivileged and have been acknowledged as an exempt organization under 501( c )( 3) of the Internal Revenue Code might certify. Additional certifications consist of a real physical location in South Dakota and the entity should be supplying real services. For extra details please see our Exempt Entity Tax Fact.
Relief Agencies that certify are needed to renew their application every five years.
SALES TAX EXEMPT STATUS APPLICATION
A seller does not have to gather sales tax when a purchaser provides a seller a finished exemption certificate at the time of sale. The buyer can offer a "single purchase" certificate for simply one transaction or a blanket certificate that applies to future purchases of certifying exempt products. Exemption certificates do not end unless the information on the certificate changes; however, we advise upgrading exemption certificates every three to 4 years. For more details about exempt entities, please review the Sales Tax Guide (PDF) and Exempt Entity Tax Fact (PDF). The exemption certificate is used to:
1. Claim exemption for:
2. Products or services planned to be resold; or
3. Products or services utilized for an exempt function.
4. Document that the buyer is an exempt entity.
Exemption Certificate
What is Use Tax?
Use Tax is the equivalent of the South Dakota sales tax. The 2 taxes apply to the sales of the very same product or services, have the exact same tax rates and have similar laws. The distinction is in how the taxes are applied. Use tax uses when state and suitable local sales tax has actually not been paid on products and services (consisting of product or services transferred electronically) that are used, saved, or consumed in South Dakota. Situations happen when South Dakota sales tax may not have actually been charged and utilize tax is due include:
- When products are bought from an unlicensed out-of-state vendor;
- When untaxed retail stock is eliminated for personal or shop usage;
When an item bought from an out-of-state supplier is delivered in South Dakota, however the other state's tax is improperly charged; and
- When a purchase is made in another state then brought into South Dakota and the item was not taxed or was taxed at a lower tax rate than applies in South Dakota, you owe usage tax.
Changes In Your Business? Let Us Know
If there are modifications in your company please utilize our online forms to submit the changes.
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 proprietor to another, from sole proprietor to a partnership, a change from sole proprietor to a corporation, or a merger, requires a brand-new tax license. You must cancel your license within 15 days and right away file a last return and pay all tax due if:
1. You close your organization;
2. You sell your organization; or
3. The ownership of business modifications.
How to Cancel Your License
If you file electronically, you can cancel your license using our online Filing and Tax Payment website. If you file a paper return, please check the out-of-business box in the upper right corner of your return, listing the last date of organization.
Address Change
Notify the department in composing if your mailing address or your service place modifications. Include the brand-new address info, reliable date of the modification, your taxpayer number, and company name.
How to Change Your Address
Please use our Change of Address Form to update your address. If you submit digitally, you can change your address using our online Filing and Tax Payment website. If you file a paper return, you can also make the updates on your income tax return.
Change of Accounting
If your business alters your accounting approach with the Internal Revenue Service you need to submit alert to the Department. You are eligible to start reporting under your new accounting approach the very first day of the following month. To alter your accounting technique, please submit our Change of Accounting Method type. Businesses can report sales based on 2 different accounting methods.
- When utilizing the accrual approach, taxes should be paid on all sales made during the reporting duration, even if you have actually not received payment. Uncollectable bills you write off as uncollectible in your books and records and are eligible to be subtracted for federal earnings tax functions.
- When you utilize the cash approach of accounting, you report gross receipts and pay tax as you receive payments. No bad debts are enabled on the money basis.
Sales Tax Statistical Reports
The most recent Sales Tax Statistical Reports are organized in the expand/collapse regions at the bottom of this page. In all cases when you pick a month, you will be seeing information put together from returns submitted with the Department throughout that month. It may cover a variety of taxpayer filing periods, such as monthly, bi-monthly, semi-annually etc. It includes returns applied for the present duration and those declared previous periods. Historical Tax Statistical Reports are likewise offered.
Streamlined Sales Tax Project
The approach of the Streamlined Sales Tax Project is easy: the state and companies need to collaborate to create simpler, more consistent sales and use tax systems.
Streamlined Sales Tax Registration System
To register, you may utilize the Streamlined Registration System. Alternatively, sellers might also use the Streamlined Sales Tax Registration System to develop 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 people get into compliance with South Dakota's sales and utilize tax laws. You can remain anonymous while examining whether this program is best for your organization. However, if you decide to participate in the program, you will require to use in composing. If you already have a South Dakota tax license for sales and utilize tax, you can not participate in this program.
Benefits of Participating
- Possible waiver of the charge charges.
- Agreement that the Department will not pursue criminal prosecution.
- Sixty days to determine the liability and prepare the returns
Receiving Voluntary Disclosure
To certify for a voluntary disclosure arrangement, you or your business:
- should not be currently signed up to gather and pay sales, usage, and specialist's excise tax in South Dakota,.
- Must not have collected 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 complete a nexus questionnaire,.
- are not under audit for any South Dakota tax,.
- are not currently under examination by any police, and you are not presently the subject of a civil action or a criminal prosecution including the sales and utilize tax covered by the agreement,.
accept register, submit returns, and pay the tax due for the look-back period within the time frame defined in the agreement,.
- will make records available for audit to verify the quantity of your liability and the precision of your statements upon demand.
Application Process
Anyone can call the Department anonymously to discover more about the program. To stay anonymous when making the formal application, you might engage an agent, such as a tax preparer, accountant or attorney. Your demand can be emailed to TDU@state.sd.us or mailed to the South Dakota Department of Revenue at 445 E. Capitol Ave Pierre, SD 57501.
Your composed request must include 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 soliciting sales in the state.
- have inventory situated in the state.
- make deliveries into the state and, if so, the methods of transportation used
2. An estimate of the tax liability for previous tax periods.
3. A declaration of whether you have gathered South Dakota taxes.
A statement that you have not been contacted previously by South Dakota or the Multistate Tax Commission Nexus Program.
You may discover it helpful to complete 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 various times throughout the year. Webinars will be held periodically. Three CPE credits and/or 0.3 CEU credits are granted for those who obtain them and participate in the complete workshop. Each seminar covers:
- How and when to apply for a tax license.
- Exemptions from sales and use taxes.
- Use tax.
- Municipal taxes.
- Purchases for resale.
- How to submit returns, both by paper and digitally
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 use for them and participate in each whole seminar. If both workshops are gone to, an individual can earn 6.0 CPE credits and/or 0.6 CEU credits.
MN/SD Border Tax Seminar - Sales Tax
- Requirements to register in SD and MN.
- Awareness of significant distinctions between South Dakota and Minnesota tax laws.
- How these differences might impact your company.
- Practical tips on how to manage 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, when in the spring in South Dakota and once in the fall in North Dakota. An overall of 3.0 CPE and/or.3 CEU credits are granted for the Sales Tax seminar, and 2.0 CPE and/or.2 CEU credits are granted to the Construction Contractors seminar if requested. If a specific attends both workshops, or a full 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 differences in between SD and ND tax laws.
- How the differences in between state tax laws may affect your organization.
- Practical suggestions on how to manage sales and use tax obligations 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 professionals.
- Prime and subcontractors.
- Point of tax.
- Special jurisdictions/tribal contracts.
- Owner provided products.
- Qualified energies.
- Filing returns
Find Upcoming Seminars
Sales Tax Rate Charts
In the past, company owners have asked if we could supply rate charts. For your benefit, we have put together charts for each of the existing sales tax rates your service might require. The charts are readily available under or Forms/ Resources page. We have actually also supplied a link below.
