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Sales & Use Tax

Business Owner Writing on a Package

The State of South Dakota relies heavily upon tax revenues to help provide vital public services, from public safety and transportation to health care and education, for our citizens.The sales tax applies to the gross receipts of all retail sales, including the sale, lease, or rental of tangible personal property or any product transferred electronically, and the sale of services. The state sales and use tax rate is 4.5%. For additional information on sales tax, please refer to our Sales Tax Guide (PDF).

See Sales Tax Guide


Quick Navigation

Who Needs A License?
How To Get A License
Remote Sellers and Marketplace Providers
Sales Tax Facts
Exemptions from Sales Tax
Exempt Entities
Exemption Certificate
What is Use Tax?
Changes In Your Business?
Sales Tax Statistical Reports
Streamlined Sales Tax Project
Sales & Use Tax Voluntary Disclosure Program
Business Education Program
Sales Tax Rate Charts
Sales & Use Tax Resources
2020 Tax Statistical Reports

 


Who Needs A License?

Any business with a physical presence in South Dakota is required to be licensed for sales tax collection. Gross sales or transactions include the sale of tangible personal property, any products transferred electronically, or services. The minimum thresholds listed below do not apply to businesses with a physical presence in South Dakota. South Dakota law also requires any business without a physical presence in South Dakota to obtain a South Dakota sales tax license and pay applicable sales tax if the business meets one or both of the following criteria in the previous or current calendar year:

  • Your business’s gross revenue from sales into South Dakota exceeded $100,000; or
  • Your business made sales for delivery into South Dakota in 200 or more separate transactions.

 

How To Get A License

 

Remote Sellers and Marketplace Providers

Remote Sellers

As of November 1, 2018, remote sellers who meet certain thresholds must obtain a South Dakota sales tax license and pay applicable sales tax. (Per SDCL 10-64)*

Who This Impacts

A remote seller is a business without a physical presence in South Dakota that meets one or both of the following criteria in the previous or current calendar year:

  • Your business’s gross revenue from sales into South Dakota exceeded $100,000; or
  • Your business made sales for delivery into South Dakota in 200 or more separate transactions.

*Gross sales or transactions include the sale of tangible personal property, any products transferred electronically, or services.

Marketplace Providers

As of March 1, 2019, marketplace providers who meet certain thresholds must obtain a South Dakota sales tax license and pay applicable sales tax (Per 10-65).

Who This Impacts

Marketplace providers are required to remit sales tax on all sales it facilitates into South Dakota if the thresholds of 200 or more transactions into South Dakota or $100,000 or more in sales to South Dakota customers are met.

Additional Resources

Remote Seller Statistics (PDF)

How Remote Sellers Are Determined (PDF)

Marketplace Bulletin (PDF)

Remote Seller Bulletin (PDF)

 

Sales Tax Facts

Sales tax applies to the gross receipts of all retail sales, including the sale, lease or rental of tangible personal property or any product transferred electronically, and the sale of all services. Department of Revenue tax fact pages explain how sales and use tax applies to each specific industry.

Tax Fact Date Updated
911 Emergency Surcharge 07/17
Accountants 06/16
Advertising Agencies 06/16
Agriculture Machinery, Attachment Units, and Irrigation Equipment 07/17
Agriculture Products 07/17
Agriculture Services 07/17
Architects, Engineers, and Surveyors 06/16
Attorneys 06/16
Auctioneers, Auction Clerks & Auction Services 01/19
Audits 07/15
Bars & Restaurants 10/18
Beauty Salons & Barber Shops 06/16
Boat Sales and Rentals

12/18

Boat Titling and Registration 12/18
Campaign Taxes 06/16
Churches 09/18
Communications Equipment - Installation & Repair 06/16
County Governments 08/18
Delivery Charges 06/16
Dentists 06/16
Direct Mail 06/16
Direct Sellers 10/18
Drop Shipments 05/19
Entertainers 10/18
Exempt Entities 03/11
Exemption Certificate 06/16
Farmers Use Tax 05/20
Financial Institutions 12/18
Fishing & Hunting Services 04/20
Flooring 06/16
Food Stamps & WIC Purchases 06/16
Franchise Operations 06/16
Funeral Services 06/16
Garbage/Solid Waste 06/16
Gravel 11/16
Gross Receipts 06/16
Health Services, Drugs, and Medical Devices 11/16
Hotels, Motels and Campgrounds 03/19
Internet 01/19
Internet Tax Freedom Act 12/19
Investigative Services Bureau 02/17
Landscaping & Lawn Care 03/18
Lease and Rental 06/16
License Requirements for Sales, Use & Contractor's Excise Tax 01/19
Lodging - Government Exemptions 03/19
Manufactured and Modular Homes 05/19
Marketplace Bulletin 02/19
Metal Mining 06/16
Motor Vehicles Sales and Purchases 03/20
Motor Vehicle Leases & Rentals 07/19
Motor Vehicle Repair & Services 03/20
Municipalities 06/16
Nonprofit Hospitals 06/16
Oil & Gas Field Services 06/16
Photographers 12/18
Prepared Food 06/16
Products Transferred Electronically 03/11
Professional Employer Organization - Request for Approval 12/17
Printers & Newspapers 06/16
Real Estate 06/16
Relief Agencies 07/13
Remote Seller Bulletin 09/18
Rodeo & Rodeo-Related Activities 06/16
Schools 03/20
Storage 09/18
Tax Increment Financing 07/20
Taxidermists 06/16
Telecommunication Services 06/16
Title & Abstract Companies 06/16
Tourism Tax 06/16
Tribal 09/19
Universities 06/16
Use Tax, Businesses 05/19
Use Tax, Individuals 05/19
Veterinarians and Animal Specialties 06/16

 

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 or service 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 certain entities from paying South Dakota sales tax or use tax on their purchases. Relief agencies and religious and private schools must apply to the department and be approved for exempt status. Their exemption number must be included on the exemption certificate. The exemption numbers for relief agencies include an “RA”; private schools include an “RS”. For more information about exempt entities, please review the Sales Tax Guide (PDF) and Exempt Entity Tax Fact (PDF). These entities include:

  • Indian tribes
  • United States government agencies
  • State of South Dakota
  • Public or municipal 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 municipal corporations of South Dakota.
  • Non-profit hospitals
  • Relief agencies
  • SD religious and private schools

Entities, listed above, that wish to apply for a sales & use tax exempt status may do so by submitting an application to the Department. We have provided a link below. 

A non-profit charitable organization that devotes its resources exclusively to the relief of the poor, distressed or underprivileged and have been recognized as an exempt organization under 501(c )(3) of the Internal Revenue Code may qualify. Additional qualifications include an actual physical location in South Dakota and the entity must be providing actual services. For additional information please see our Exempt Entity Tax Fact.

Relief Agencies that qualify are required to renew their application every five years.

SALES TAX EXEMPT STATUS APPLICATION

 

Exemption Certificate

A seller does not have to collect sales tax when a purchaser gives 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 applies to future purchases of qualifying exempt items. Exemption certificates do not expire unless the information on the certificate changes; however, we recommend updating exemption certificates every three to four years. For more information 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 intended to be resold; or
  3. Products or services used for an exempt purpose.
  4. Document that the purchaser is an exempt entity.

Exemption Certificate

What is Use Tax?

Man Sitting in the back of a Van

Use Tax is the counterpart of the South Dakota sales tax. The two taxes apply to the sales of the same products and services, have the same tax rates and have similar laws. The difference is in how the taxes are applied. Use tax applies when state and applicable municipal sales tax has not been paid on products and services (including products and services transferred electronically) that are used, stored, or consumed in South Dakota. Situations occur when South Dakota sales tax may not have been charged and use tax is due include:

  • When items are purchased from an unlicensed out-of-state vendor;
  • When untaxed retail inventory is removed for personal or store use;
  • When a product purchased from an out-of-state vendor is delivered in South Dakota, but the other state’s tax is incorrectly 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 business please use our online forms to submit the changes.

 

Cancel Your License

Sales or contractor's excise tax licenses are not transferable. A change in ownership or legal organization, 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 new tax license. You must cancel your license within 15 days and immediately file a final return and pay all tax due if:

  1. You close your business;
  2. You sell your business; or
  3. The ownership of the business changes.

How to Cancel Your License

If you file electronically, you can cancel your license using our online Filing and Tax Payment portal. 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 business.

 

Address Change

Notify the department in writing if your mailing address or your business location changes. Include the new address information, effective date of the change, your taxpayer number, and business name.

How to Change Your Address

Please use our Change of Address Form to update your address. If you file electronically, you can change your address using our online Filing and Tax Payment portal. If you file a paper return, you can also make the updates on your tax return.

 

Change of Accounting

If your company changes your accounting method with the Internal Revenue Service you must submit notification to the Department. You are eligible to start reporting under your new accounting method the first day of the following month. To change your accounting method, please fill out our Change of Accounting Method form. Businesses can report sales based on two different accounting methods.

  • When using the accrual method, taxes must be paid on all sales made during the reporting period, even if you have not received payment. Bad debts you write off as uncollectible in your books and records and are eligible to be deducted for federal income tax purposes.
  • When you use the cash method of accounting, you report gross receipts and pay tax as you receive payments. No bad debts are allowed on the cash 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 select a month, you will be viewing data compiled from returns filed with the Department during that month. It may cover a variety of taxpayer filing periods, such as monthly, bi-monthly, semi-annually etc. It includes returns filed for the current period and those filed for previous periods. Historical Tax Statistical Reports are also available.

 

Streamlined Sales Tax Project

The philosophy of the Streamlined Sales Tax Project is simple: the state and businesses should work together to create simpler, more uniform sales and use tax systems.

 

Streamlined Sales Tax Registration System

To register, you may use the Streamlined Registration System. Alternatively, sellers may also 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

 

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

 

Benefits of Participating

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

 

Qualifying for Voluntary Disclosure

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

  • must not be currently registered to collect and pay sales, use, and contractor's 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

Anyone can contact the Department anonymously to find out more about the program. To remain anonymous when making the formal application, you may engage a representative, such as a tax preparer, accountant or attorney. 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. Your written request should contain the following information:

  1. 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
  2. An estimate of the tax liability for previous tax periods.
  3. A statement of whether you have collected South Dakota taxes.
  4. A statement that you have not been contacted previously by South Dakota or the Multistate Tax Commission Nexus Program.

Multitstate Disclosure Form

 

Business Education Program

Woman Smiling at a Desk

Basic Sales Tax Seminar

These three-hour seminars are held in Sioux Falls, Rapid City, and Mitchell three to four different times throughout the year. Webinars will be held periodically. Three CPE credits and/or 0.3 CEU credits are awarded for those who apply for them and attend the full seminar. 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 file returns, both by paper and electronically

Find Upcoming Seminars

 

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 twice 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 apply for them and attend each entire seminar. If both seminars are attended, an individual can earn 6.0 CPE credits and/or 0.6 CEU credits.

MN/SD Border Tax Seminar – Sales Tax (9:00-12:00 p.m.)

Topics include:

  • Requirements to register in SD and MN
  • Awareness of major differences between South Dakota and Minnesota tax laws
  • How these differences may affect your business
  • Practical tips on how to manage sales and use tax obligations for both states
  • Streamlined Sales Tax Project
  • Filing returns

 

MN/SD Border Tax Seminar – Construction Contractors (1:00 – 4:00 p.m.)

Topics include:

  • Requirements for registration in SD and MN
  • Differences between SD and MN taxes for contractors
  • Prime and subcontractors
  • Point of taxation
  • Special jurisdictions/tribal agreements
  • Owner furnished materials
  • Qualified utilities
  • Filing returns

Find Upcoming Seminars

 

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 once in the fall in North Dakota. A total of 3.0 CPE and/or .3 CEU credits are awarded for the Sales Tax seminar, and 2.0 CPE and/or .2 CEU credits are awarded to the Construction Contractors seminar if requested. If an individual attends both seminars, or a full day, 5.0 CPE and/or 0.5 CEU credits are awarded.

ND/SD Border Tax Seminar – Sales Tax (9:00 – 12:00 p.m.)

Topics include:

  • Requirements to register in SD and ND
  • Awareness of major differences between SD and ND tax laws
  • How the differences between state tax laws may affect your business
  • 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 (1:00 – 3:00 p.m.)

Topics include:

  • Requirements for registration in SD and MN
  • Differences between SD and MN taxes for contractors
  • Prime and subcontractors
  • Point of taxation
  • Special jurisdictions/tribal agreements
  • Owner furnished materials
  • Qualified utilities
  • Filing returns

Find Upcoming Seminars

Sales Tax Rate Charts

In the past, business owners have asked if we could provide rate charts. For your convenience, we have put together charts for each of the current sales tax rates your business may need. The charts are available under or Forms / Resources page. We have also provided a link below. 

Sales Tax Rate Charts

 

Sales & Use Tax Resources

 


2020 Tax Statistical Reports

This report includes all amounts reported on Excise Tax Returns within the Standard Industrial Classification (SIC), Major Group and Division.

Taxable sales within the Standard Industrial Classification (SIC) Division, Major Group & Industry for all cities. Separately covers the general municipal tax rate and the municipal gross receipts tax rate.

Shows a comparison of municipal tax due reported to the same month in the previous year grouped by city. This report is not a cumulative total, rather the number of sales, use, and municipal gross receipts tax paid to each town per month.

Taxable sales within the Standard Industrial Classification (SIC) Division, Major Group & Industry for all cities. Separately covers the general municipal tax rate and the municipal gross receipts tax rate.

Shows state taxable sales for each county broken down by cities located within that county compared to the previous year. A city may exist in more than one county.

Shows state taxable sales for each county broken down by cities located within that county and what percentage of the total sales are allocated to each city and county. A city may exist in more than one county.

Shows state taxable sales within the Standard Industrial Classification (SIC), Major Group and Division.

Shows state taxable sales within the Standard Industrial Classification (SIC) Division, Major Group & Industry.

Show state tourism taxable sales grouped by industry within each county.

Shows comparison of state taxable sales reported this month to the same month in the previous year grouped by Standard Industrial Classification (SIC) Major Groups and Divisions.

Shows state taxable sales within the Standard Industrial Classification (SIC) Division, Major Group & Industry for all cities. Sales are grouped with the city by zip code and do NOT indicate activity subject to the applicable city tax.

Shows a comparison of municipal tax due for selected cities compared to the same period in the previous year.


2019 Sales Tax Statistical Reports

In all cases when you select a month, you will be viewing data compiled from returns filed with the Department during that month. It may cover a variety of taxpayer filing periods, such as monthly, bi-monthly, semi-annually etc. It includes returns filed for the current period and those filed for previous periods.

See Historical Reports

This report includes all amounts reported on Excise Tax Returns within the Standard Industrial Classification (SIC), Major Group and Division.

Taxable sales within the Standard Industrial Classification (SIC) Division, Major Group & Industry for all cities. Separately covers the general municipal tax rate and the municipal gross receipts tax rate.

Shows a comparison of municipal tax due reported to the same month in the previous year grouped by city. This report is not a cumulative total, rather the number of sales, use, and municipal gross receipts tax paid to each town per month.

Taxable sales within the Standard Industrial Classification (SIC) Division, Major Group & Industry for all cities. Separately covers the general municipal tax rate and the municipal gross receipts tax rate.

Shows state taxable sales for each county broken down by cities located within that county compared to the previous year. A city may exist in more than one county.

Shows state taxable sales for each county broken down by cities located within that county and what percentage of the total sales are allocated to each city and county. A city may exist in more than one county.

Shows state taxable sales within the Standard Industrial Classification (SIC), Major Group and Division.

Shows state taxable sales within the Standard Industrial Classification (SIC) Division, Major Group & Industry.

Shows comparison of state taxable sales reported this month to the same month in the previous year grouped by Standard Industrial Classification (SIC) Major Groups and Divisions.

Shows state taxable sales within the Standard Industrial Classification (SIC) Division, Major Group & Industry for all cities. Sales are grouped with the city by zip code and do NOT indicate activity subject to the applicable city tax.

Shows a comparison of municipal tax due for selected cities compared to the same period in the previous year.

Sales & Use Tax Online Forms

taxes

Filing and Paying Taxes Online Help

Find helpful information regarding how to file and pay your taxes online in South Dakota.

Learn More About Filing and Paying Taxes Online Help
tribal

Sales of Products or Service within Indian Country

Find sales and use tax laws related to sales of products or services within Indian country.

Learn More About Sales of Products or Service within Indian Country

Sales & Use Tax Laws & Regulations

Learn more about laws and rules governing South Dakota sales and use tax.

Sales & Use Tax for Individuals

Laws, regulations, and information for individuals regarding taxation on sales and use tax in South Dakota.