SALES TAX 101 for SOUTH DAKOTA

By December 3, 2018 South Dakota

The 10 Basics Every South Dakota Business Should Know About SALES TAX

What is Sales Tax in South Dakota?

South Dakota sales tax applies to the retail sale, lease or rental of tangible personal property or any product transferred electronically. Many services are also subject to sales tax.

Are All Goods and Services Taxable?

No

How Do I Know What’s Taxable and What’s Not?

This link can help you determine what is taxable and what isn’t in South Dakota. Click here.

Who Pays Sales Tax?

Consumers pay sales tax.  Merchants do not pay sales tax out of their own pockets.  It’s commonly referred to as a pass through tax.

What Am I Responsible For?

You are required to collect sales tax, hold it secure and send it to the State on-time and in-full.

When Is My Sales Tax Payment Due in South Dakota?

South Dakota Sales Tax is due monthly on the 20th of the following month. Click here for more information.

How Do I Know How Much Sales Tax to Charge? 

The South Dakota state sales tax rate is 4.5%. Local municipalities can add up to 2% to the total tax rate. Find more information here.  The final and definitive answer is always the sales tax rate posted on the State Department of Revenue website.  Rates posted on the web are often not up-to-date and incorrect. It’s always the merchant’s responsibility to charge the correct sales tax rate.

Who Gets the Sales Tax Money?

In South Dakota all sales tax is paid directly to the State.

How Do I Manage Tax Exempt Sales?

Tax exempt organizations such as schools and religious organizations are often exempt from sales tax. They are required to give you copy of their “TAX EXEMPT CERTIFICATE” at the time of the sale and you are required to keep this certificate on file. Failing to do so may result in you paying the sales tax out of your own pocket if you have a sales tax audit.

What if I Forget to Pay or Spend the Money and Can’t Pay?

South Dakota has severe penalties for missing tax payments. You can find the penalties for late payments here. If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt.  In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.

South Dakota Department of Revenue

TAX RATE: The statewide sales tax rate of South Dakota is 4.5%. Cities and/or municipalities of South Dakota are allowed to collect their own rate that can add up to 2% to the total rate.

South Dakota Sales and Use TAX HELP: (800) 829-9188

This resource page is for informational purposes only.  If you have further questions regarding sales tax please contact DAVO support at 888-659-8432 or consult your tax adviser.

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