Most businesses starting in South Dakota that are selling a product or offering services will need to register for a sales tax license. This is commonly referred to as a seller’s permit, sales tax permit, sales tax number or sales tax registration.
The sales tax license is obtained through the South Dakota Department of Revenue as a part of filing for the South Dakota Tax Application. In addition to registering for a sales tax license, businesses can register to begin hiring employees and collecting withholding taxes.
Check out the rest of this guide to find out who needs a sales tax license, what products and services are taxable, how to register for a permit and reporting requirements.
Who needs a sales tax license in South Dakota?
A business must register for a sales tax license in South Dakota when:
- A business has “nexus” (significant presence in the state) such as a retail store, office or warehouse where products are produced, stored and/or delivered
- Selling products and taxable services in South Dakota (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- Employees (including sales representatives or agents) are working in South Dakota
- An online business located in South Dakota is selling taxable products to South Dakota residents
- An out-of-state business selling to South Dakota residents and one of
- Total annual sales of tangible personal property to South Dakota residents is $100,000 or more; or
- Having 200 or more transactions with South Dakota residents annually.
What products and services are taxable in South Dakota?
There are a few exceptions, but almost all physical products are taxable when sold at retail in South Dakota. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Prescriptions, parts used on agricultural equipment and some pesticides are tax-exempt. See the full list of sales tax exemptions in South Dakota.
Digital products are taxable in South Dakota.
Most services are taxable in South Dakota, however there are a few exceptions, some of which include:
- Health services
- Educational services
- Agricultural services
- Forestry services
- Services provided by certain membership organizations
How to register for a sales tax license in South Dakota
A sales tax license can be obtained by registering online with the South Dakota Department of Revenue.
Information needed to register includes:
- Legal business name
- Type of business entity (Sole Proprietorship, Partnership, Corporation, LLC)
- Description of what products or services are being sold
- Physical address and mailing address of the business
- North American Industry Classification System (NAICS) code
- Federal Employer Identification Number (FEIN)
- Name, address, SSN, driver’s license number, phone number and email of owners/officers/members
How much does a sales tax license cost in South Dakota?
There is no cost for a sales tax license in South Dakota.
How long does it take to get an South Dakota sales tax license?
Typical processing for a sales tax license in South Dakota is up to 5 days.
Do you have to renew your South Dakota sales tax license?
The sales tax license is a one-time registration and no renewals are needed. Be mindful that if any information about the business changes such as the mailing address, additional locations or change in ownership, those changes need to be updated with the Department of Revenue.
Sales tax reporting
How is sales tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business who then sends it to the South Dakota Department of Revenue.
How much sales tax is charged?
The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide tax, there are additional sales taxes that may be added by cities and municipalities. To find sales tax rates, see the sales tax rates by address page from the South Dakota Department of Revenue.
When are South Dakota sales tax returns due?
The Department of Revenue will determine a filing frequency based on the expected volume of sales, which will be monthly, quarterly or annually.
Filings are due the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, in which case would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
Sales tax on purchases for resale
A business is able to purchase items to resell without paying state sales tax. The tax liability is passed from the wholesaler or distributor to the retailer who will then charge sales tax to the end user of the item.
Wholesalers and distributors will require a sales tax number and a completed South Dakota Certificate of Exemption form to document the items being purchased are for resale.
If you have questions about the sales tax license, the South Dakota Department of Revenue has a guide to sales and use taxes in South Dakota or can be contacted by calling 800-829-9188 or email at email@example.com.