South Dakota Sales Tax
South Dakota sales tax is a state-imposed tax on the sale, lease, or rental of tangible personal property or any product that is transferred electronically and the sale of most services. The rate varies by county, and cities may also impose a local sales tax.
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Sales tax is a vital revenue source for state and local governments. It helps fund essential services such as education, healthcare, and infrastructure development. The sales tax is a complex issue, with many factors at play. One of the most important is whether you have a nexus in a particular state, which is determined by your economic activity. South Dakota sales tax is collected on retail transactions. This tax money helps fund state programs. Businesses that sell taxable goods or services must register with the state to collect and remit sales tax. They must also keep records and files. Failure to file or pay sales tax can result in penalties and interest charges.
South Dakota Sales Tax is 4.5 percent, and some cities and counties impose additional local taxes. To determine the total statewide and local rate for a purchase, use a sales tax calculator or lookup tool. The state’s sales and use tax is administered by the Department of Revenue. Sales tax is based on the “nexus” principle, or a significant connection with the state. To avoid a sales tax audit, businesses must register with the state, collect and remit sales tax on all taxable purchases, and keep detailed records.
South Dakota Sales Tax Due Dates
Once your business has registered with South Dakota sales tax, it’s important to be aware of the state’s filing and payment due dates. Your registration letter should indicate the filing frequency assigned to you and the associated due dates.
Generally, returns and payments are due by the 20th of the month following the reporting period for those who file electronically. For those who file non-electronically, returns and payments are due by the 25th of that month. If the due date falls on a weekend or holiday, the return and payment will be considered timely if submitted by the next business day.
Sales and use tax applies to most tangible goods sold in South Dakota and some services. However, there are some exceptions, including delivery charges. It’s recommended that you consult with a sales tax professional to ensure that you are in compliance with the state’s laws.
South Dakota Sales Tax Exemption
Some goods and services are exempt from South Dakota sales tax, such as water purchased in bulk or through a water supply system, prescription drugs, purchases made with food stamps, and lottery tickets. Using the proper calculation methods, claiming valid exemptions, meeting filing due dates, and maintaining detailed records can help businesses stay compliant with South Dakota sales tax laws.
South Dakota Sales Tax Registration
Before a business can start making sales in South Dakota, it must register for sales tax collection. The state’s Department of Revenue offers a convenient online registration process. Depending on the nature of your business, you may also need a federal Employer Identification Number (EIN).
Once registered, sellers must collect sales tax on taxable goods and services sold in the state. This includes tangible products like software, digital goods such as media streaming services and eBooks, and even some services, such as professional services provided by attorneys, architects, and landscapers. However, the rules can be complex, and exemptions are common.
States used to be able to require sellers to register and collect sales tax only when they had physical presence in the state, but the Supreme Court’s decision in South Dakota v. Wayfair opened the door for states to tax remote sellers via economic nexus.
