SD South Dakota State sales tax rates

STATEWIDE SALES TAX RATE

4.2%

ECONOMIC SALES THRESHOLD

$100,000

TRANSACTIONS THRESHOLD

200

Do you need to collect sales tax in South Dakota?

You’ll need to collect sales tax in South Dakota if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.

Do you have physical nexus in South Dakota?

Any “retailer maintaining a place of business in the state” has physical nexus in South Dakota. See their definition on p. 5 here.

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 or more than 200 transactions in the state in the previous or current calendar year to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. .

Is what you’re selling even 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 4.5%. For more information on excise taxes related to construction projects, consult the South Dakota Department of Revenue’s site (as of this writing, excise taxes stand at 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.

Collecting Sales Tax

South Dakota is a destination-based sales tax state. So if you live in South Dakota, collect sales tax at the rate at your buyer’s location. The South Dakota sales tax rate is 4.5%.

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 Returns Due?

When you file and pay South Dakota sales tax depends on two things: 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 either at the state’s discretion, and this can be monthly, bimonthly, quarterly, or semi-annually.

Important to Note: 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.