Sales of Products or Service within Indian Country
South Dakota has nine tribes. Five tribes currently have comprehensive tax collection agreements; two tribes have limited agreements; and two tribes do not have sales or use tax agreements. It is our recommendation that prior to working within Indian country, you contact the tribe to see what requirements they may have for businesses / contractors working within their jurisdictions.
Tax Collection Agreements
Currently, five Indian tribes in South Dakota have comprehensive tax collection agreements with the State that include, but are not limited to, sales, use, tourism, and contractor’s excise taxes. The five Indian tribes with comprehensive tax collection agreements are Cheyenne River Sioux Tribe, Crow Creek Sioux Tribe, Oglala Sioux Tribe, Rosebud Sioux Tribe, and Standing Rock Sioux Tribe. Two Indian tribes have limited tax collection agreements that include, but are not limited to, use tax and contractor’s excise tax. The two Indian tribes with limited tax collection agreements are the Sisseton Wahpeton Oyate and the Yankton Sioux Tribe.
The tax collection agreements ensure that all retail transactions or construction services on property included in a tax collection agreement are subject to the same taxes, tax rates, and exemptions. All businesses, including those owned by tribal members, are responsible for remitting tax. Indian country that is part of a tax collection agreement is considered a Special Jurisdiction. All tax due in each Special Jurisdiction is reported on the state tax return using the code assigned to that Special Jurisdiction. The tax remitted is then distributed between the State and Tribal governments according to the terms of the tax collection agreements.
Comprehensive Tax Collection Agreement
The five Indian tribes with comprehensive tax collection agreements are Cheyenne River Sioux Tribe, Crow Creek Sioux Tribe, Oglala Sioux Tribe, Rosebud Sioux Tribe, and Standing Rock Sioux Tribe. All five of these agreements include sales, use, contractor’s excise, and tourism tax. The Special Jurisdiction areas for the five comprehensive tax collection agreements are as follows:
- Cheyenne River Special Jurisdiction: the Cheyenne River Indian Reservation, which is Dewey and Ziebach Counties, excluding a 500 foot strip of land in the northern-most portions of Dewey and Ziebach Counties.
- Crow Creek Special Jurisdiction: the Crow Creek Indian Reservation, which includes portions of Hughes, Hyde, and Buffalo Counties.
- Oglala Special Jurisdiction: the Pine Ridge Indian Reservation, which is Oglala Lakota County, and that portion of Jackson County south of the White River. This Special Jurisdiction also includes the Allen Store in Allen, SD, and the East Wind Casino and Sunrise Housing Development, which is located on the east edge of Martin, SD.
- Rosebud Special Jurisdiction: the Rosebud Indian Reservation, which is Todd County. This Special Jurisdiction also includes certain Indian country defined by 18 U.S.C. § 1151 (b) and (c) in Mellette, Tripp, and portions of Gregory and Lyman Counties controlled by the Rosebud Sioux Tribe.
- Standing Rock Special Jurisdiction: the Standing Rock Indian Reservation, which is Corson County and a 500 foot strip of land in the northern-most portions of Dewey and Ziebach Counties.
Limited Tax Collection Agreement
The two Indian tribes with limited tax collection agreements are the Sisseton Wahpeton Oyate and the Yankton Sioux Tribe. The limited agreements include use tax and contractor’s excise tax, but not sales tax at each of the specific businesses and locations listed below.
- Sisseton Wahpeton Oyate
- The Dakota Connection Property — a casino, restaurant, convenience store, and gas station located east of Sisseton at the junction of I-29 and HWY 10;
- The Agency Village Property — a convenience store and gas station located in Agency Village (10 miles south of Sisseton);
- The Dakota Sioux Property — a casino, hotel, restaurant, convenience store, and gas station located northwest of Watertown;
- The Buffalo Lanes Property — a bowling alley located east of Sisseton at the junction of I-29 and HWY 10; and
- Dakota Crossing Grocery Store — a grocery store located east of Sisseton on HWY 10.
- Yankton Sioux Tribe
- Fort Randall Casino & Smokeshop property; and
- Yankton Sioux Tribe Travel Plaza
Sales Tax and Use Tax
Sales tax is assessed on products and services at the time of purchase, lease, or rental. Use tax is due on purchases if no sales tax has been imposed. Do not remit additional state tax on these transactions. Sales tax and use tax are reported on the state sales tax return.
- Products or services purchased or delivered within the Special Jurisdictions are subject to 4.2% sales tax or use tax.
- State and tribal sales and use taxes are reported under the appropriate Special Jurisdiction codes on the state sales tax return.
How to Report Sales Tax and / or Use Tax for Special Jurisdictions
- Include all sales on Line 1, Gross Sales. All sales to exempt entities, such as Tribal governments, should be included on this line.
- Deduct sales to Tribal governments (nontaxable sales) on Line 3, Non-Taxable Sales.
- Deduct taxable sales made within the Special Jurisdictions (Indian country included in a Tax Collection Agreement) on Line 4, Special Jurisdiction Sales.
Under Line 6, City and Special Jurisdiction Calculation Detail, see Special Jurisdiction Codes and Rates Chart listed below.
- Report taxable sales made within Special Jurisdictions using the code assigned to that Jurisdiction.
- Report taxable sales subject to municipal tax under the appropriate municipal name and code.
|Cheyenne River Special Jurisdiction||408-4||4.2% (Sales & Use Tax)|
|Crow Creek Special Jurisdiction||417-4||4.2% (Sales & Use Tax)|
|Oglala Special Jurisdiction||411-4||4.2% (Sales & Use Tax)|
|Rosebud Special Jurisdiction||412-4||4.2% (Sales & Use Tax)|
|Standing Rock Special Jurisdiction||413-4||4.2% (Sales & Use Tax)|
|Sisseton Wahpeton Special Jurisdiction||414-4||4.2% (Use Tax)|
|Yankton Special Jurisdiction||418-4||4.2% (Use Tax)|
For more information, see Tribal Tax Facts (PDF).