South Dakota Excise Tax Exemption Certificate

Sales tax is a complex issue for many businesses. Understanding the rules and requirements for collecting and reporting sales tax in South Dakota is important.

Whether you’re a seasoned online seller or just starting out, you should be familiar with sales and use tax laws in South Dakota. This is a state and local tax levied on the sale of goods or services that must be charged, collected, and remitted to the Department of Revenue (DOR).

As the state continues evolving its sales tax policy, it’s crucial to know which products are taxable and which are exempt to remain compliant. Some of the most common exemptions include prescription medicine, farm machinery, advertising services, and replacement parts. Other items are taxable, such as fuel and motor vehicles. In South Dakota, exemption certificates can help navigate the excise tax landscape. This guide focuses on the two main types:

Exemption certificates exempt qualifying purchases from sales or use tax, but eligibility is crucial.

Sales and Use Tax Exemption Certificate

This certificate allows qualifying purchases to be exempt from sales or use tax. It’s important to remember that not all entities or purchases qualify for this exemption.

Who Qualifies?

Relief Agencies: Organizations with a valid permit containing the letters “RA” issued by the South Dakota Department of Revenue can use an exemption certificate to purchase tax-exempt products and services.

  • Purchases for Resale (with Exceptions): Generally, you can claim an exemption if you’re buying an item to resell later. However, there might be exceptions depending on the specific product or industry.
  • Specific Agricultural Products and Services: South Dakota exempts certain agricultural products and services from sales or use tax. This includes items like pesticides used for agricultural purposes and motor fuel used in agricultural equipment.

Where to Get the Form: There isn’t a single, standardized form for sales and use tax exemption certificates. Businesses typically provide their own pre-formatted certificates that you can fill out with your details.

More Information: For a comprehensive overview of sales and use tax in South Dakota, consult the Department of Revenue’s website:

Prime Contractor's Exemption Certificate
South Dakota Excise Tax Exemption Certificate 1

Prime Contractor’s Exemption Certificate

This certificate is specific to the construction industry and exempts subcontractors from the contractor’s excise tax.

Who Qualifies?

  • Subcontractors: Businesses hired by a prime contractor on a construction project can obtain a Prime Contractor’s Exemption Certificate to avoid paying the contractor’s excise tax.

Who Issues It?

  • Prime Contractor: The prime contractor responsible for the entire construction project issues the exemption certificate for each specific project they undertake.

What Information Does it Include?

  • The prime contractor’s excise tax license number serves as identification.
  • The project location ensures the exemption applies to the specific work site.
  • A clear description of the project helps identify the work that qualifies for the exemption.
  • More Information: For details regarding contractor’s excise tax and exemption certificates, refer to the South Dakota Department of Revenue’s website:

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