Sales and Use Tax Voluntary Disclosure Program

South Dakota's Voluntary Disclosure Program is designed to help businesses or individuals get into compliance with South Dakota's sales and use tax laws. You can remain anonymous while investigating whether this program is right for your business. However, if you decide to participate in the program, you will need to apply in writing.

Benefits of participating in this program

  • Possible waiver of a portion of the interest charges.
  • Agreement that the Department will not pursue criminal prosecution.
  • Sixty days to determine the liability and prepare the returns.

If you already have a South Dakota tax license for sales and use tax, you cannot participate in this program.

Qualifying for Voluntary Disclosure

To qualify for a voluntary disclosure agreement, you or your business:

  • are not registered to collect and pay sales, use, and contractors' excise tax in South Dakota,
  • must not have been contacted 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 currently under investigation by any law enforcement agency, and you are not currently the subject of a civil action or a criminal prosecution involving the sales and use tax covered by the agreement,
  • 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 available for audit to verify the amount of your liability and the accuracy of your statements upon request.

Application Process

If you wish to know more about the Voluntary Disclosure Program, you may contact the Department anonymously. To remain anonymous when making the formal application, you may engage a representative, such as a tax preparer, accountant or attorney.

Your written request should contain the following information:

  • A description of your activities and the date the activities began, including whether you do any of the following:
    • own or lease property in the state
    • have employees or independent sales representatives soliciting sales in the state
    • have inventory located in the state
    • make deliveries into the state and, if so, the means of transportation used
  • An estimate of the tax liability for previous tax periods.
  • A statement of whether you have collected South Dakota taxes.
  • A statement that you have not been contacted previously by South Dakota or the Multistate Tax Commission Nexus Program.

You may find it beneficial to complete a voluntary disclosure with the Multistate Tax Commission if you have multiple states in which you need to register.

For more information: Application for Multistate Voluntary Disclosure Form

Confidentiality

The Department will keep the agreement confidential and will not disclose any terms or conditions of the agreement to any tax authorities of any state or governmental authority or to any person except as provided by exchange of information agreements. The Department respectfully requests that you, the taxpayer, will not disclose the terms of the agreement to any third party.

Disqualification

You will be disqualified and the agreement rendered null and void if any one of the following is discovered:

  • Previous contact of any kind with the Department.
  • Misrepresentation of any facts set forth in the Disclosure Agreement.
  • Failure to comply with the terms of the agreement.
  • Tax was collected and not remitted.

Voluntary Disclosure Program Contacts

Kathy Smith, Sr. Revenue Agent

South Dakota Department of Revenue
445 E Capitol Avenue
Pierre, SD  57501

Phone: (605) 773-3311 (605) 773-3311
Fax: (605) 773-6729
Email: TDU@state.sd.us

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445 E Capitol Avenue, Pierre, SD 57501




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