Who Needs A License?
Any organization with a physical existence in South Dakota is required to be licensed for sales tax collection. Gross sales or transactions include the sale of tangible individual residential or commercial property, any items transferred digitally, or services. The minimum limits noted below do not apply to companies with a physical existence in South Dakota. South Dakota law likewise needs any service without a physical existence in South Dakota to obtain a South Dakota sales tax license and pay appropriate sales tax if business satisfies the following requirements in the previous or present calendar year:
How To Get A License
- Register for a South Dakota sales tax license utilizing the online Tax License Application.
- Register with multiple states through the Streamlined system at streamlinedsalestax.org.
Remote Sellers and Marketplace Providers
Remote Sellers
Remote sellers who meet particular thresholds must acquire a South Dakota sales tax license and pay appropriate sales tax. (Per SDCL 10-64) *
A remote seller is a service without a physical existence in South Dakota that meets the following requirements in the previous or existing calendar year:
- Your service's gross profits from sales into South Dakota went beyond $100,000
* Gross sales or transactions include the sale of concrete personal residential or commercial property, any items transferred digitally, or services.
Marketplace Providers
Marketplace providers who fulfill a certain limit should get a South Dakota sales tax license and pay relevant sales tax (Per SDCL 10-65).
Who This Impacts
As of March 1, 2019, marketplace service providers have actually been needed to accredit their company and remit applicable sales tax on all sales it helps with into South Dakota if:
- The marketplace provider is a remote seller; or
- The marketplace supplier facilitates the sales of a minimum of one market seller that satisfies the remote seller requirements; or
- The market service provider facilitates the sales of 2 or more marketplace sellers that, when the sales are combined, meets the remote seller requirements.
If the business does not have a physical presence but has more than $100,000 in gross sales into South Dakota in the previous or present calendar year, business is required to accredit their organization and remit applicable 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 receipts of all retail sales, including the sale, lease or rental of concrete personal residential or commercial property or any item transferred digitally, and the sale of all services. Department of Revenue tax truth pages describe how sales and use tax uses to each particular market.
07/23
Exemptions from Sales Tax
There are 4 reasons that product or services would be exempt from South Dakota sales tax.
1. The purchaser is a tax exempt entity;
2. The product or service is particularly exempt from sales tax;
3. The purchaser submits a claim for exemption;
4. The product is delivered 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 firms and religious and independent schools need to use 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 include an "RA"; independent 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 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, consisting of 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 independent schools
Entities, listed above, that wish to apply for a sales & utilize tax exempt status may do so by sending an application to the Department. We have actually provided a link below.
A non-profit charitable company that commits its resources solely to the relief of the poor, distressed or underprivileged and have been acknowledged as an exempt company under 501( c )( 3) of the Internal Revenue Code may qualify. Additional certifications include a real physical location in South Dakota and the entity should be offering actual services. For additional information please see our Exempt Entity Tax Fact.
Relief Agencies that certify 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 purchaser can give a "single purchase" certificate for just one transaction or a blanket certificate that uses to future purchases of certifying exempt items. Exemption certificates do not end unless the details on the certificate modifications; however, we advise upgrading exemption certificates every 3 to four years. To find out more about exempt entities, please evaluate 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 used for an exempt function.
4. Document that the buyer is an exempt entity.
Exemption Certificate
What is Use Tax?
Use Tax is the counterpart of the South Dakota sales tax. The two taxes use to the sales of the same services and products, have the exact same tax rates and have similar laws. The distinction remains in how the taxes are applied. Use tax uses when state and suitable municipal sales tax has actually not been paid on product or services (including items and services transferred digitally) that are utilized, 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 purchased from an unlicensed out-of-state vendor;
- When untaxed retail stock is eliminated for personal or shop usage;
When an item purchased from an out-of-state supplier is provided 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 product was not taxed or was taxed at a lower tax rate than uses in South Dakota, you owe use tax.
Changes In Your Business? Let Us Know
If there are modifications in your business please use our online types to send the modifications.
Cancel Your License
Sales or specialist's excise tax licenses are not transferable. A change in ownership or legal organization, such as from one sole owner to another, from sole owner to a collaboration, a modification from sole owner to a corporation, or a merger, requires a brand-new tax license. You need to cancel your license within 15 days and instantly file a last return and pay all tax due if:
1. You close your organization;
2. You offer 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 inspect the out-of-business box in the upper right corner of your return, noting the last date of business.
Address Change
Notify the department in writing if your mailing address or your service area changes. Include the new address information, effective date of the modification, your taxpayer number, and company name.
How to Change Your Address
Please use our Change of Address Form to upgrade your address. If you file digitally, you can change your address utilizing our online Filing and Tax Payment portal. If you submit a paper return, you can also make the updates on your income tax return.
Change of Accounting
If your company alters your accounting method with the Internal Revenue Service you need to send notice to the Department. You are eligible to start reporting under your brand-new accounting method the very first day of the following month. To change your accounting approach, please complete our Change of Accounting Method kind. Businesses can report sales based on 2 various accounting methods.
- When using the accrual method, taxes need to be paid on all sales made during the reporting duration, even if you have not received payment. Bad debts you cross out as uncollectible in your books and records and are eligible to be deducted for federal earnings tax functions.
- When you utilize the cash technique of accounting, you report gross receipts and pay tax as you receive payments. No bad debts 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 choose a month, you will be viewing information put together from returns filed with the Department during that month. It may cover a variety of taxpayer filing periods, such as month-to-month, bi-monthly, semi-annually etc. It includes returns declared the current duration and those declared previous periods. Historical Tax Statistical Reports are also offered.
Streamlined Sales Tax Project
The approach of the Streamlined Sales Tax Project is basic: the state and services should collaborate to produce simpler, more uniform sales and utilize tax systems.
Streamlined Sales Tax Registration System
To register, you might utilize the Streamlined Registration System. Alternatively, sellers might likewise use 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 developed to assist organizations or individuals get into compliance with South Dakota's sales and use tax laws. You can stay anonymous while investigating whether this program is right for your organization. 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 utilize tax, you can not take part in this program.
Benefits of Participating
- Possible waiver of the charge charges.
- Agreement that the Department will not pursue prosecution.
- Sixty days to identify the liability and prepare the returns
Qualifying for Voluntary Disclosure
To get approved for a voluntary disclosure agreement, you or your organization:
- must not be currently signed up to collect and pay sales, use, and specialist's excise tax in South Dakota,.
- Must not have gathered sales tax,.
- need to not have actually been called by either the Department of Revenue or the Multistate Tax Commission to schedule an audit, or to complete a nexus questionnaire,.
- are not under audit for any South Dakota tax,.
- are not presently under examination by any law enforcement company, and you are not currently the topic of a civil action or a prosecution involving the sales and utilize tax covered by the arrangement,.
agree to register, file returns, and pay the tax due for the look-back period within the time frame specified in the agreement,.
- will make records readily available for audit to validate the amount of your liability and the accuracy of your statements upon demand.
Application Process
Anyone can contact the Department anonymously to learn more about the program. To remain anonymous when making the formal application, you may engage an agent, such as a tax preparer, accounting professional or lawyer. Your demand 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 composed demand ought to include the following information:
1. A description of your activities and the date the activities started, 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 representatives getting sales in the state.
- have inventory located in the state.
- make deliveries into the state and, if so, the means of transportation used
2. A price quote of the tax liability for previous tax periods.
3. A statement of whether you have collected South Dakota taxes.
A statement that you have not been called formerly by South Dakota or the Multistate Tax Commission Nexus Program.
You might discover it advantageous to finish a voluntary disclosure with the Multistate Tax Commission if you have numerous states in which you need to sign up.
Multistate Disclosure Form
Business Education Program
Basic Sales Tax Seminar
These three-hour seminars are kept in Sioux Falls, Rapid City, and Mitchell three to four different times throughout the year. Webinars will be held occasionally. Three CPE credits and/or 0.3 CEU credits are granted for those who make an application for them and attend the full seminar. Each workshop covers:
- How and when to apply for a tax license.
- Exemptions from sales and utilize 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 workshop for those who look for them and go to each whole workshop. If both seminars are attended, a person 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 major differences between South Dakota and Minnesota tax laws.
- How these distinctions may impact your company.
- Practical ideas on how to handle sales and utilize tax commitments 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, as soon as in the spring in South Dakota and as soon as 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 granted to the Construction Contractors workshop if asked for. If a private participates in both seminars, or a complete day, 5.0 CPE and/or 0.5 CEU credits are awarded.
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 distinctions in between state tax laws might affect your organization.
- Practical tips 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 consist of:
- Requirements for registration in SD and MN.
- Differences in between SD and MN taxes for specialists.
- Prime and subcontractors.
- Point of tax.
- Special jurisdictions/tribal arrangements.
- Owner supplied products.
- 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 assembled charts for each of the present sales tax rates your organization may need. The charts are readily available under or Forms/ Resources page. We have likewise offered a link listed below.
