Who Needs A License?
Any service with a physical existence 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 products transferred electronically, or services. The minimum thresholds noted below do not apply to businesses with a physical existence in South Dakota. South Dakota law also needs any service without a physical presence in South Dakota to obtain a South Dakota sales tax license and pay suitable sales tax if the organization fulfills the following criteria in the previous or existing 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 fulfill specific limits must 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 calendar year:
- Your business's gross revenue from sales into South Dakota surpassed $100,000
* Gross sales or deals include the sale of concrete personal residential or commercial property, any products moved digitally, or services.
Marketplace Providers
Marketplace companies who meet a specific threshold should obtain a South Dakota sales tax license and pay appropriate sales tax (Per SDCL 10-65).
Who This Impacts
As of March 1, 2019, marketplace suppliers have actually been needed to accredit their business and remit suitable sales tax on all sales it helps with into South Dakota if:
- The market service provider is a remote seller; or
- The marketplace supplier facilitates the sales of at least one marketplace seller that satisfies the remote seller criteria; or
- The market supplier facilitates the sales of 2 or more market sellers that, when the sales are integrated, fulfills the remote seller criteria.
If business does not have a physical presence but has more than $100,000 in gross sales into South Dakota in the previous or current calendar year, business is required to certify 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 applies to the gross invoices of all retail sales, including 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 truth pages describe how sales and utilize tax uses to each specific industry.
07/23
Exemptions from Sales Tax
There are 4 factors that product or services would be exempt from South Dakota sales tax.
1. The buyer is a tax exempt entity;
2. The services or product is specifically exempt from sales tax;
3. The purchaser sends a claim for exemption;
4. The product is provided to a point outside of the State of South Dakota.
Exempt Entities
State law excuses particular entities from paying South Dakota sales tax or utilize tax on their purchases. Relief agencies and religious and independent schools should use to the department and be authorized for exempt status. Their exemption number must be consisted of on the exemption certificate. The exemption numbers for relief agencies consist of an "RA"; independent schools include an "RS". For more details about exempt entities, please examine the Sales Tax Guide (PDF) and Exempt Entity Tax Fact (PDF). These entities consist of:
- United States 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, 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 medical facilities
- Relief firms
- SD spiritual and independent schools
Entities, noted above, that dream to get a sales & utilize tax exempt status may do so by sending an application to the Department. We have actually offered a link listed below.
A non-profit charitable organization that dedicates its resources specifically to the relief of the poor, distressed or impoverished and have been acknowledged as an exempt company under 501( c )( 3) of the Internal Revenue Code may qualify. Additional qualifications include a real physical location in South Dakota and the entity must be providing real services. For 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 need to collect sales tax when a buyer gives a seller a finished exemption certificate at the time of sale. The buyer can provide a "single purchase" certificate for simply one deal or a blanket certificate that applies to future purchases of certifying exempt items. Exemption certificates do not expire unless the details on the certificate modifications; however, we recommend upgrading exemption certificates every three to 4 years. For more information about exempt entities, please review 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 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 counterpart of the South Dakota sales tax. The 2 taxes apply to the sales of the same product or services, have the exact same tax rates and have comparable laws. The difference is in how the taxes are applied. Use tax applies when state and applicable local sales tax has not been paid on product or services (consisting of services and products moved electronically) that are utilized, kept, or consumed in South Dakota. Situations take place when South Dakota sales tax might 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 inventory is eliminated for individual or store use;
When a product bought from an out-of-state vendor 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 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 organization please utilize our online forms to submit the modifications.
Cancel Your License
Sales or professional's excise tax licenses are not transferable. A modification in ownership or legal organization, such as from one sole proprietor to another, from sole owner to a partnership, a modification from sole proprietor to a corporation, or a merger, needs a 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 service;
2. You sell your service; or
3. The ownership of business changes.
How to Cancel Your License
If you file electronically, you can cancel your license using our online Filing and Tax Payment website. 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 organization.
Address Change
Notify the department in composing if your mailing address or your service place changes. Include the brand-new address details, reliable date of the change, your taxpayer number, and organization 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 website. If you submit a paper return, you can also make the updates on your income tax return.
Change of Accounting
If your business changes your accounting approach with the Irs you need to send alert to the Department. You are eligible to begin 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 kind. Businesses can report sales based on 2 various accounting techniques.
- When utilizing the accrual technique, taxes need to be paid on all sales made throughout the reporting period, even if you have not received payment. Uncollectable bills you compose off as uncollectible in your books and records and are eligible to be subtracted for federal income tax purposes.
- When you utilize the cash method of accounting, you report gross invoices and pay tax as you get payments. No bad financial obligations are enabled on the money basis.
Sales Tax Statistical Reports
The most current Sales Tax Statistical Reports are arranged in the expand/collapse areas at the bottom of this page. In all cases when you pick 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 monthly, bi-monthly, semi-annually etc. It includes returns applied for the present period and those applied for previous periods. Historical Tax Statistical Reports are also readily available.
Streamlined Sales Tax Project
The viewpoint of the Streamlined Sales Tax Project is easy: the state and organizations must work together to develop simpler, more consistent sales and use tax systems.
Streamlined Sales Tax Registration System
To sign up, you might utilize the Streamlined Registration System. Alternatively, sellers may 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 developed to help organizations or individuals enter compliance with South Dakota's sales and use tax laws. You can remain anonymous while investigating whether this program is best for your company. However, if you decide to get involved in the program, you will need to use in writing. If you currently have a South Dakota tax license for sales and utilize tax, you can not get involved in this program.
Benefits of Participating
- Possible waiver of the charge charges.
- Agreement that the Department will not pursue prosecution.
- Sixty days to determine the liability and prepare the returns
Getting Approved For Voluntary Disclosure
To certify for a voluntary disclosure arrangement, you or your business:
- must not be presently registered to collect and pay sales, usage, and specialist's excise tax in South Dakota,.
- Must not have gathered sales tax,.
- need to not have 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 law enforcement firm, and you are not presently the topic of a civil action or a criminal prosecution involving the sales and use tax covered by the agreement,.
accept register, submit returns, and pay the tax due for the look-back period within the time frame specified in the arrangement,.
- will make records offered for audit to validate the quantity of your liability and the accuracy of your declarations upon demand.
Application Process
Anyone can call the Department anonymously to learn more about the program. To remain anonymous when making the official application, you might engage an agent, such as a tax preparer, accounting professional or attorney. Your demand can be emailed to [email protected] 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 started, including whether you do any of the following: - own or lease residential or commercial property in the state.
- have employees or independent sales representatives obtaining sales in the state.
- have inventory situated in the state.
- make deliveries into the state and, if so, the ways of transportation used
2. An estimate of the tax liability for previous tax periods.
3. A statement of whether you have gathered South Dakota taxes.
A statement that you have not been gotten in touch with previously by South Dakota or the Multistate Tax Commission Nexus Program.
You might find it helpful to finish a voluntary disclosure with the Multistate Tax Commission if you have multiple states in which you require to register.
Multistate Disclosure Form
Business Education Program
Basic Sales Tax Seminar
These three-hour seminars are held in Sioux Falls, Rapid City, and Mitchell 3 to 4 various times throughout the year. Webinars will be held occasionally. Three CPE credits and/or 0.3 CEU credits are granted for those who obtain them and attend the complete seminar. Each workshop covers:
- How and when to obtain 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 awarded for each seminar for those who make an application for them and participate in each entire seminar. If both workshops are gone to, a person 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 major differences in between South Dakota and Minnesota tax laws.
- How these differences might impact your business.
- Practical suggestions on how to handle sales and utilize tax obligations 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 when in the fall in North Dakota. A total 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 attends both seminars, or a complete day, 5.0 CPE and/or 0.5 CEU credits are granted.
ND/SD Border Tax Seminar - Sales Tax
- Requirements to sign up in SD and ND.
- Awareness of significant distinctions in between SD and ND tax laws.
- How the distinctions between state tax laws might impact your company.
- Practical pointers on how to handle sales and use tax commitments 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 between SD and MN taxes for professionals.
- Prime and subcontractors.
- Point of taxation.
- Special jurisdictions/tribal agreements.
- Owner supplied materials.
- Qualified energies.
- Filing returns
Find Upcoming Seminars
Sales Tax Rate Charts
In the past, entrepreneur have asked if we could provide rate charts. For your convenience, we have actually put together charts for each of the existing sales tax rates your organization may require. The charts are readily available under or Forms/ Resources page. We have likewise supplied a link listed below.
