Navigating South Dakota’s sales tax guidelines
Online (or remote) sellers and businesses must understand the laws guiding sales tax compliance when they make sales in South Dakota. Does your business need to file a sales tax return and collect sales tax in South Dakota? Ensure your business remains tax compliant in the state, and use TaxJar’s sales tax guide to explore sales tax guidelines. Businesses can also use TaxJar’s simple sales tax calculator to estimate how much sales tax they may need to remit to the state.
Do you need to collect sales tax in South Dakota?
You’ll need to collect sales tax in South Dakota if you have either physical or economic nexus in the state. Businesses with a physical nexus have a tangible presence or activity in South Dakota. In addition, businesses or online sellers with economic nexus have sales in South Dakota that meet the state’s economic threshold for total revenue or the number of transactions.
Do you have physical nexus in South Dakota?
Any “retailer maintaining a place of business in the state” has physical nexus in South Dakota.
Do you have economic nexus in South Dakota?
Effective November 1, 2018, South Dakota considers vendors who make more than $100,000 in sales annually in the state in the previous or current calendar year to have economic nexus. These vendors are obligated to collect sales tax from buyers in the state. South Dakota offers a Remote Seller Bulletin that provides more context about economic thresholds in the state.
South Dakota was part of the landmark case – South Dakota v. Wayfair – that transformed economic nexus laws across the country.
Is what you’re selling taxable?
Most services in South Dakota are subject to sales tax with some exceptions in the construction industry.
The state sales tax rate for South Dakota is 4.2%. The South Dakota Department of Revenue provides additional information about Contractor’s Excise Tax, which accounts for 2% on gross receipts.
Tangible products are generally taxable in South Dakota, with a few exceptions like prescription medication and gasoline.
Is SaaS taxable in South Dakota?
SaaS is considered a taxable service in South Dakota, as are other charges to access software.
What is use tax?
If sales tax has not been paid on products and services – including electronically-delivered products – that are used or consumed in South Dakota, a business must still pay use tax. South Dakota requires businesses to determine if a vendor charged the correct sales tax (or no tax at all) to report use tax on their tax return.
The South Dakota Department of Revenue offers additional directives for use tax, explaining when businesses must pay this tax and examples of use tax liabilities.
How to get a sales tax permit in South Dakota
You can apply online using the South Dakota Tax Application or call 1-800-829-9188 for more information on applying in person. Businesses can also visit TaxJar’s registration page to request for our team to manage their South Dakota registration.
You need the following information to register for a sales tax permit in South Dakota:
- Personal identification info (SSN, address, etc.)
- Business identification info (EIN, address, etc.)
- Business entity type
- Business description
- Date started doing business in South Dakota
It’s free to apply for a sales tax permit, but other South Dakota business registration fees may apply.
Use the Streamlined Sales Tax™ Registration System (SSTRS)
South Dakota is a Streamlined Sales Tax™ Member state. The Streamlined Sales Tax™ Registration System provides a central hub for registering for sales tax permits in member states. The system is designed to simplify the sales tax permit process for businesses and online sellers that have economic nexus across multiple states.
Businesses can use this system to apply for a license in any member state. The SSTRS also enables businesses also to contract with a Certified Service Provider™ (CSP™ ), who offer sales tax concierge services and provide sales tax assistance to businesses in all the states where they are registered through the SSTRS.
Collecting sales tax in South Dakota
South Dakota is a destination-based sales tax state. If you live in South Dakota, collect sales tax at the rate at your buyer’s location. The South Dakota sales tax rate is 4.2%.
You can look up your local sales tax rate with TaxJar’s Sales Tax Calculator.
Should you collect sales tax on shipping charges in South Dakota?
Delivery charges (i.e. shipping charges) on taxable items are taxable. If what you are selling is tax-exempt, then you don’t need to charge sales tax on the shipping charges. If some items in the shipment are taxable and some are not, just calculate what percentage of the shipping charges apply to the taxable item(s) and charge sales tax on that.
When are South Dakota sales tax returns due?
When you file and pay South Dakota sales tax depends on your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in South Dakota?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In South Dakota, you will be required to file and remit sales tax at the state’s discretion, and this can be monthly, bimonthly, quarterly, or semi-annually.
South Dakota sales tax returns are generally always due the 20th day of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day. However, the payment is generally due by the 30th day of the month following the due date. The South Dakota Department of Revenue includes a page on its website that lists all filing due dates
Filing sales tax in South Dakota
When it’s time to file sales tax in South Dakota, follow these three steps:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to calculate how much sales tax you owe in South Dakota
Calculating how much sales tax you should remit to the state of South Dakota is easy with TaxJar’s South Dakota sales tax report.
Connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your South Dakota sales tax return will be waiting for you in TaxJar.
How to file and pay sales tax in South Dakota
You have two options for filing and paying your South Dakota sales tax:
- File online via the South Dakota Department of Revenue. You can remit your payment through their online system.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations, or filling out complex sales tax returns.
