South Dakota’s sales and use tax rate is 4.5 percent. The state also has several special taxes and local jurisdiction taxes at the city and county levels, including lodging taxes, alcohol taxes, admissions taxes, and taxes on eating establishments. Other taxes include telecommunications taxes, tourism taxes, and motor vehicle taxes.
This guide does not fully describe all of South Dakota’s laws and regulations regarding taxes. Businesses should contact a business attorney or visit the South Dakota Department of Revenue website to learn more about the rules, regulations, tax laws and tax information associated with their industries and the types of taxes due.
Types of taxes
In addition to South Dakota’s 4.5-percent sales tax, the state has a use tax, which is the rate.
Sales and use tax for sales of goods
Businesses making retail sales and selling some services must collect and remit South Dakota’s sales tax of 4.5 percent. If a business purchases tangible personal property and stores or uses it instead of reselling it, the business must pay the use tax on the items. For example, a business that purchases 10 cases of Widget A and only sells eight cases. Instead of trying to sell a slow-moving item, the business decides to use the other two cases in the business. It must pay the use tax on the two cases. The sales tax return and use tax return are on the same tax form.
Motor vehicle tax
South Dakota has a motor vehicle excise tax fee of 4 percent of the purchase price. Additionally, South Dakota has a motor vehicle gross receipts tax of 4.5 percent that applies to the rental of cars, trucks, motorcycles and vans if the business rents them to the same person for less than 28 days. Certain trailers are also subject to the tax if they are rented for 6 months or less.
Cigarette and tobacco tax
Cigarettes are taxed at $1.53 per pack of 20 and $1.92 per pack of 25. Other tobacco products are taxed at 35 percent of the wholesale purchase price. Additionally, retail sales of cigarettes are subject to the state sales tax rate and the rate at the local jurisdictions, if any.
South Dakota also has a rule that retailers cannot sell cigarettes and other tobacco products for less than 8 percent above the distributor’s or wholesaler’s price.
The state has a tourism tax of 1.50 percent on the following types of establishments:
- Lodging establishments.
- Recreational equipment rentals.
- Motor vehicle rentals.
- Recreational services.
- Spectator events.
- Visitor attractions.
South Dakota levies the tax year-round. Additionally, the tax applies to “visitor-intensive” businesses from July through September.
If a business is exempt from sales tax, it is also exempt from the tourism tax. For example, fair admissions are not subject to the state’s sales tax. Thus, they are not subject to the tourism tax. However, rodeo admissions, rides at a fair and concessions are subject to sales tax. Thus, those items and services are subject to the tourism tax.
The telecommunications tax of 4 percent applies to several telecommunications services, including:
- 800 services.
- Fixed wireless service.
- 900 services.
- Mobile wireless service.
- Prepaid calling service.
- Paging service.
- Prepaid wireless calling service.
- Value-added non-voice data service.
- Private communication service.
- Voice over internet protocol (VoIP).
Prepaid wireless 911 emergency surcharge
Wireless service providers and other businesses that sell prepaid wireless service must collect and remit the prepaid wireless 911 emergency surcharge of 2 percent on gross receipts from retail sales.
Taxable items include prepaid wireless airtime cards and prepaid wireless minutes and plans in addition to other services. If the surcharge is not itemized, it is subject to sales taxes for the state and municipalities.
If the retailer sells prepaid wireless services with non-taxable products for a single price, the entire price is taxable.
Boat excise tax
A boat excise tax of 3 percent applies to the purchase of most boats in addition to the sales tax.
Discretionary taxes (Local sales tax)
Local jurisdictions can impose a gross receipts tax, municipal sales tax and use tax. Although the taxes are for the municipalities, the South Dakota Department of Revenue administers the taxes.
The general municipal sales tax can be up to 2 percent. The gross receipts tax can be up to 1 percent and is in addition to the municipal sales tax.
Municipalities can impose the gross receipts tax on:
- Alcoholic beverages.
- Lodging accommodations.
- Eating establishments.
- Admisssions to places of amusements.
- Cultural events.
- Athletic events.
The South Dakota Department of Revenue also administers these taxes.
The following special jurisdictions have the following taxes:
- Cheyenne River: Sales/Use of 4.5 percent; Excise of 2 percent; and River Tourism of 1.5 percent.
- Crow Creek: Sales/Use of 4.5 percent; Excise of 2 percent; and Tourism of 1.5 percent.
- Oglala: Sales/Use of 4.5 percent; Excise of 2 percent; and Tourism of 1.5 percent.
- Rosebud: Sales/Use of 4.5 percent; Excise of 2 percent; and Tourism of 1.5 percent.
- Standing Rock: Sales/Use of 4.5 percent; Excise of 2 percent; and Tourism of 1.5 percent.
- Sisseton Wahpeton: Use tax only of 4.5 percent and Excise tax of 2 percent.
- Yankton: Use tax only of 4.5 percent and Excise tax of 2 percent.
Additionally, the following cities also have special taxes, which are in addition to the state sales tax and the special jurisdictional taxes:
- Dupree: 1 percent.
- Eagle Butte: 2 percent.
- Isabel: 2 percent.
- Timber Lake: 2 percent.
- McIntosh: 2 percent.
- McLaughlin: 2 percent.
- Morristown: 1.50 percent.
- Mission: 2 percent.
Businesses can also look up their tax rate by address.
Registering for and filing South Dakota's taxes
Business filers should register to file South Dakota’s taxes at the South Dakota Department of Revenue’s EPath page. The online option allows a business to pay by ACH Debit or ACH Credit.
For businesses that prefer to pay by check, send payments to:
South Dakota Department of Revenue
Mail Stop 5055
Pierre, SD 57501
Businesses can also pay over the phone by calling (800) 829-9188. Payment options are ACH Debit or credit card.
The South Dakota Department of Revenue will accept cash payment in person at one of their offices.
Due dates for retail sales tax
Sales and use taxes are due on the 20th of the month following the collection month. For example, taxes a business collected in January are due on or before February 20.
South Dakota sales tax holiday
South Dakota does not have a sales tax holiday for sales of tangible personal property.
South Dakota sales tax exemptions
The law in South Dakota exempts certain entities from paying sales tax on purchases. Nonprofit and other relief agencies, private schools and religious entities must apply to the South Dakota Department of Revenue for approval of tax exempt status.
Certain entities are tax exempt, including:
- State of South Dakota.
- United States Government.
- Public corporations of the State of South Dakota.
- Municipal corporations of the State of South Dakota.
- Indian tribes.
- Volunteer or municipal fire and ambulance departments.
- Nonprofit hospitals.
Remote and marketplace sellers
If a business sells taxable tangible personal property and services into South Dakota, it must file sales tax returns and remit payments if it makes $100,000 or more in gross receipts in South Dakota, or if it has 200 or more individual transactions into the state.
Businesses located in South Dakota must collect another state’s sales taxes if they have more than $100,000 or 200 or more individual transactions into another state. The best way to pay other states’ sales taxes is to register for a Streamline account.
South Dakota’s sales tax is 4.5 percent. The state also has several special taxes and additional sales taxes for local jurisdictions.
South Dakota uses the same certificate as a resale certificate or exemption certificate.
Excise tax licenses are not transferable. If the business changes hands or changes its legal organization type, it must cancel the license and obtain a new license within 15 days. You can cancel it online or check the “Out of Business” box in the upper right corner of a paper return.
A business must notify the South Dakota Department of Revenue in writing of a mailing address change. In the correspondence, include the new address, the effective date of the new address, the business taxpayer number, and the name of the business on the change of address form or change the address in your online account.
If the business changes its accounting method with the IRS, the business must also notify the South Dakota Department of Revenue. If the business uses the accrual method, sales tax is due on the date, even if the business has not collected it. With the cash method, the sales tax is based on gross receipts, so you can pay it as you receive payments.