If your business sells taxable goods or services in South Dakota, you must register and collect sales tax from your customers. You must also file returns and remit the tax to the state. Failure to do so can result in hefty penalties and interest. To determine if you need to collect South Dakota Sales Tax, check whether your business has nexus in the state. Nexus can be established by having a physical presence in the state, such as a store or office. It can also be determined by economic activity, such as having over $100,000 in annual sales or 200+ separate transactions.
Once you have registered to collect sales tax, calculate the amount of sales tax owed by multiplying your taxable sales by the state and local rate. You can then submit the return and payment through the department’s e-services portal or by mail. Always keep records of your taxable sales and filing dates.
Typically, you will be required to collect sales tax on tangible products sold or delivered to customers within the state. However, digital products such as eBooks and media streaming services can also be subject to sales tax. The state of South Dakota is a destination-based state for sales tax, meaning that the applicable rate will be determined by the customer’s location or the place where they take possession of the item.
If you are selling taxable products in South Dakota, you must register for a sales tax permit. The state’s Department of Revenue website provides detailed instructions for registering, including the minimum thresholds for economic nexus. In addition, you must charge sales tax on all taxable shipments to South Dakota addresses, even if the customer is not a resident of the state.
South Dakota Sales Tax Exempt Items
Some goods are exempt from South Dakota sales tax, such as gasoline and prescription drugs. Other goods, including clothing and footwear, software-as-a-service subscriptions, and services like legal, accounting, and pet care, are taxable. The state’s sales tax laws are complex and constantly changing. For this reason, many businesses outsource their sales tax collection and filing to an accountant or bookkeeper.
South Dakota Sales Tax Due Dates
The state determines South Dakota sales tax due dates and may be monthly, quarterly, or annually. They depend on the amount of sales tax collected and remitted and the rate in each local jurisdiction.
If you are required to collect sales tax in South Dakota, it is crucial to understand the state’s laws and requirements, including registration procedures, tax return deadlines, which goods and services are taxable, and record-keeping recommendations. In addition, you should be aware of any exemptions that apply to your business.