Who Needs A License?
Any service with a physical existence in South Dakota is needed to be licensed for sales tax collection. Gross sales or transactions include the sale of concrete personal residential or commercial property, any products transferred digitally, or services. The minimum limits listed below do not use to organizations with a physical existence in South Dakota. South Dakota law also needs any business without a physical presence in South Dakota to get a South Dakota sales tax license and pay appropriate sales tax if business fulfills 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 numerous states through the Streamlined system at streamlinedsalestax.org.
Remote Sellers and Marketplace Providers
Remote Sellers
Remote sellers who satisfy certain limits must acquire a South Dakota sales tax license and pay appropriate sales tax. (Per SDCL 10-64) *
A remote seller is an organization without a physical presence in South Dakota that meets the following criteria in the previous or current calendar year:
- Your service's gross revenue from sales into South Dakota exceeded $100,000
* Gross sales or transactions consist of the sale of tangible personal residential or commercial property, any items moved electronically, or services.
Marketplace Providers
Marketplace providers who satisfy a particular threshold should get a South Dakota sales tax license and pay applicable sales tax (Per SDCL 10-65).
Who This Impacts
As of March 1, 2019, marketplace suppliers have actually been needed to license their organization and remit suitable sales tax on all sales it assists in into South Dakota if:
- The market service provider is a remote seller; or
- The market provider facilitates the sales of at least one marketplace seller that satisfies the remote seller criteria; or
- The market supplier assists in the sales of 2 or more market sellers that, when the sales are combined, satisfies the remote seller requirements.
If the company does not have a physical presence however has more than $100,000 in gross sales into South Dakota in the previous or current fiscal year, the service is needed to license their business and remit suitable 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 receipts of all retail sales, consisting of the sale, lease or leasing of tangible personal residential or commercial property or any item transferred electronically, and the sale of all services. Department of Revenue tax fact pages describe how sales and utilize tax uses to each particular market.
07/23
Exemptions from Sales Tax
There are 4 factors that product or services would be exempt from South Dakota sales tax.
1. The purchaser is a tax exempt entity;
2. The service or product is particularly exempt from sales tax;
3. The buyer submits a claim for exemption;
4. The product is provided to a point outside of the State of South Dakota.
Exempt Entities
State law excuses specific entities from paying South Dakota sales tax or use tax on their purchases. Relief agencies and spiritual and independent schools need to use to the department and be approved for exempt status. Their exemption number need to be included on the exemption certificate. The exemption numbers for relief companies include an "RA"; independent schools consist of an "RS". For additional information about exempt entities, please review the Sales Tax Guide (PDF) and Exempt Entity Tax Fact (PDF). These entities consist of:
- United States federal government companies
- State of South Dakota
- Indian people
- Public or local 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 firms
- SD spiritual and independent schools
Entities, noted above, that desire to get a sales & use tax exempt status may do so by sending an application to the Department. We have offered a link listed below.
A non-profit charitable organization that devotes its resources solely to the relief of the poor, distressed or underprivileged and have been acknowledged as an exempt organization under 501( c )( 3) of the Internal Revenue Code might qualify. Additional qualifications include a real physical location in South Dakota and the entity need to be offering actual services. For extra details please see our Exempt Entity Tax Fact.
Relief Agencies that certify are required to restore their application every 5 years.
SALES TAX EXEMPT STATUS APPLICATION
A seller does not need to gather sales tax when a buyer offers a seller a finished exemption certificate at the time of sale. The purchaser can provide a "single purchase" certificate for simply one transaction or a blanket certificate that applies to future purchases of certifying exempt items. Exemption certificates do not end unless the details on the certificate modifications; nevertheless, we advise updating exemption certificates every three to four years. For additional information about exempt entities, please evaluate 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 meant to be resold; or
3. Products or services used for an exempt purpose.
4. Document that the buyer is an exempt entity.
Exemption Certificate
What is Use Tax?
Use Tax is the equivalent of the South Dakota sales tax. The 2 taxes use to the sales of the same services and products, have the very same tax rates and have comparable laws. The distinction is in how the taxes are used. Use tax applies when state and appropriate municipal sales tax has actually not been paid on items and services (consisting of services and products moved electronically) that are utilized, saved, or consumed in South Dakota. Situations occur 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 inventory is gotten rid of for individual or store use;
When an item bought from an out-of-state vendor 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 applies in South Dakota, you owe use tax.
Changes In Your Business? Let Us Know
If there are changes in your company please utilize our online types to submit the changes.
Cancel Your License
Sales or professional's excise tax licenses are not transferable. A change in ownership or legal company, such as from one sole owner to another, from sole owner to a partnership, a modification from sole proprietor to a corporation, or a merger, requires a brand-new tax license. You need to cancel your license within 15 days and immediately file a final return and pay all tax due if:
1. You close your company;
2. You sell your company; or
3. The ownership of the organization modifications.
How to Cancel Your License
If you submit digitally, you can cancel your license using our online Filing and Tax Payment portal. 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 writing if your mailing address or your business area modifications. Include the brand-new address information, effective date of the modification, your taxpayer number, and organization name.
How to Change Your Address
Please use our Change of Address Form to update your address. If you submit electronically, you can alter your address utilizing our online Filing and Tax Payment portal. If you submit a paper return, you can also make the updates on your tax return.
Change of Accounting
If your business alters your accounting approach with the Internal Revenue Service you should submit alert to the Department. You are qualified to begin reporting under your new accounting technique the first day of the following month. To alter your accounting approach, please complete our Change of Accounting Method form. Businesses can report sales based on two different accounting approaches.
- When using the accrual method, taxes must be paid on all sales made during the reporting duration, even if you have not received payment. Uncollectable bills you cross out as uncollectible in your books and records and are eligible to be subtracted for federal income tax functions.
- When you use the money approach of accounting, you report gross invoices and pay tax as you receive payments. No bad financial obligations are permitted on the money basis.
Sales Tax Statistical Reports
The most current Sales Tax Statistical Reports are organized in the expand/collapse areas at the bottom of this page. In all cases when you choose a month, you will be viewing data put together from returns filed with the Department during that month. It may cover a range of taxpayer filing periods, such as regular monthly, bi-monthly, semi-annually and so on. It includes returns declared the current period and those filed for previous durations. Historical Tax Statistical Reports are also offered.
Streamlined Sales Tax Project
The philosophy of the Streamlined Sales Tax Project is basic: the state and companies must work together to produce simpler, more consistent sales and utilize tax systems.
Streamlined Sales Tax Registration System
To sign up, you might utilize the Streamlined Registration System. Alternatively, sellers might likewise use the Streamlined Sales Tax Registration System to develop 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 created to assist companies or people enter compliance with South Dakota's sales and use tax laws. You can remain confidential while investigating whether this program is right for your company. However, if you choose to take part in the program, you will require to use in composing. If you already 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 penalty 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 receive a voluntary disclosure arrangement, you or your service:
- must not be currently registered to gather and pay sales, use, and specialist's excise tax in South Dakota,.
- Must not have actually collected sales tax,.
- must not have actually been contacted by either the Department of Revenue or the Multistate Tax Commission to schedule an audit, or to complete a nexus survey,.
- are not under audit for any South Dakota tax,.
- are not presently under examination by any law enforcement agency, and you are not currently the subject of a civil action or a prosecution including the sales and utilize tax covered by the contract,.
concur to register, submit returns, and pay the tax due for the look-back duration within the time frame specified in the agreement,.
- will make records readily available for audit to confirm the amount of your liability and the precision of your declarations upon request.
Application Process
Anyone can call the Department anonymously to find out more about the program. To stay anonymous when making the formal application, you may engage a representative, such as a tax preparer, accountant 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 written demand must 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 workers or independent sales agents soliciting sales in the state.
- have inventory situated in the state.
- make shipments into the state and, if so, the means of transportation used
2. A price quote of the tax liability for previous tax durations.
3. A declaration of whether you have actually gathered South Dakota taxes.
A declaration that you have actually not been gotten in touch with formerly by South Dakota or the Multistate Tax Commission Nexus Program.
You might discover it beneficial to finish a voluntary disclosure with the Multistate Tax Commission if you have multiple states in which you require to register.
Business Education Program
Basic Sales Tax Seminar
These three-hour seminars are kept in Sioux Falls, Rapid City, and Mitchell three to 4 various times throughout the year. Webinars will be held periodically. Three CPE credits and/or 0.3 CEU credits are awarded for those who look for them and participate in the complete workshop. Each seminar covers:
- How and when to get a tax license.
- Exemptions from sales and utilize taxes.
- Use tax.
- Municipal taxes.
- Purchases for resale.
- How to file returns, both by paper and electronically
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 granted for each seminar for those who get them and go to each entire workshop. If both workshops are participated in, a person can make 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 distinctions between South Dakota and Minnesota tax laws.
- How these differences may impact your business.
- Practical ideas on how to manage sales and utilize tax responsibilities 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 two times 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 granted for the Sales Tax seminar, and 2.0 CPE and/or.2 CEU credits are awarded to the Construction Contractors seminar if asked for. If a private goes to both workshops, or a complete day, 5.0 CPE and/or 0.5 CEU credits are granted.
ND/SD Border Tax Seminar - Sales Tax
- Requirements to register in SD and ND.
- Awareness of major differences between SD and ND tax laws.
- How the distinctions between state tax laws might affect your organization.
- Practical ideas 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 include:
- Requirements for registration in SD and MN.
- Differences in between SD and MN taxes for specialists.
- Prime and subcontractors.
- Point of taxation.
- Special jurisdictions/tribal arrangements.
- Owner provided materials.
- Qualified utilities.
- Filing returns
Find Upcoming Seminars
Sales Tax Rate Charts
In the past, company owners have asked if we might offer rate charts. For your convenience, we have actually assembled charts for each of the present sales tax rates your service might need. The charts are offered under or Forms/ Resources page. We have actually likewise supplied a link listed below.
