How to Register for a Sales Tax License in South Dakota
Most businesses starting in South Dakota 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 & use 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 determine who needs a sales tax license, what products and services are taxable, how to register for a permit, and reporting requirements.
Also See: Guide to Starting a Business in South Dakota
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 economic nexus. Economic nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Selling tangible personal property and taxable services in South Dakota (includes occasionally selling items at craft shows, fairs, seminars, shows, etc.)
- Selling admissions to places of amusement, athletic, and cultural events
- 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
- A remote seller meets one of the following scenarios:
- Making total annual sales of tangible personal property to South Dakota residents of $100,000 or more; or
- Shipping 200 or more transactions to South Dakota residents annually.
What products and services are taxable in South Dakota?
Physical products
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
Digital products are taxable in South Dakota.
Services
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, Limited Liability Company (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) with the IRS
- Name, address, SSN, driver’s license number, phone number, and email of owners/officers/members
Sales tax reporting
How is sales tax collected?
When a business sells a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business which is then sent to the South Dakota Department of Revenue.
How much is sales tax in South Dakota?
The sales tax rate is based on the gross receipts of all retail sales and 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. The municipal gross receipts tax (MGRT) is most commonly seen on the sale of alcoholic beverages, eating establishments, lodging accommodations, etc. 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 sales volume, which will be monthly, quarterly, or annually.
Filings are due on the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, which 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.
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 a South Dakota sales tax license?
Typical processing for a sales tax license in the state of 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 South Dakota Department of Revenue.
How do I get a wholesale license in South Dakota?
A business can 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 (also referred to as a wholesale license, resale certificate, or sales tax exemption certificate) to document that the items being purchased are for resale.
Is a business license the same thing as a sales tax license?
In addition to registering for a sales tax permit, there may be other business licenses needed before starting a business in South Dakota.
If you have additional 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 bustax@state.sd.us.
