Total Range for 2025
| Base state sales tax rate | 4.50% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Local rate range | 0%-2% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Total rate range | 4.5%-6.5% | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Economic sales nexus threshold | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | |
| Transactions threshold | N/A | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
| Sales tax return filing due date | 20th of following month | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate | Base state sales tax rate |
The base state sales tax rate in South Dakota is 4.5%, but since the local rates range from 0-2% the total sales tax range is 4.5-6.5%.
How to calculate your sales tax rate
Use our online sales tax calculator to determine the combined state and local sales tax rate for each location where you have a physical or economic nexus. Just enter your state and ZIP code to get your sales tax rate.
Example of using the sales tax rate in a tax calculation:
- Jacket price: $59.99 (before tax)
- Rapid City sales tax: 6.5% (4.5% state + 2% local)
- Quick calculation: multiply price by tax (rounded): $59.99 x 0.07 = $4.20 (estimated tax)
- Total price: $59.99 + $4.20 (estimated tax) = $64.19 (approx.)
Nexus: Why do you need to collect sales tax in South Dakota?
If you’re selling goods and services in South Dakota then sales tax might apply! To determine your obligation, you need to understand “nexus,” which ties businesses to states for tax purposes.
Two types of nexus exist:
- Physical Nexus: Having a physical presence, like an office, warehouse, or employees in South Dakota, triggers this type. If you do, you likely need to collect sales tax.
- Economic Nexus: This kicks in when your sales within South Dakota exceed a certain economic threshold. Even without a physical presence, surpassing this threshold requires collecting sales tax.
Services
- Generally, services are taxable in South Dakota with some exceptions in construction.
Goods
- Tangible personal property is generally taxable, with exceptions like prescription medication and gasoline.
Freight/Shipping
- Shipping and freight charges may be taxable depending on whether they are separately stated on the invoice.
Clothing
- Yes clothing is taxable in South Dakota
Electronics
- Electronics are considered tangible goods and are subject to sales tax
SaaS
- SaaS is treated as a taxable service in South Dakota, along with other fees for accessing software.
Digital Products
- Products delivered electronically are subject to sales and use tax in South Dakota.
Software
- Software downloaded electronically is usually considered taxable.
How to register for sales tax in South Dakota
To register for sales tax in South Dakota, you can apply online through the South Dakota Tax Application website: https://dor.sd.gov/businesses/
Here’s what you’ll typically need to have on hand when registering:
- Personal identification information (Social Security Number, address, etc.)
- Business identification information (Employer Identification Number (EIN), address, etc.)
- Business entity type (Sole proprietorship, LLC, Corporation, etc.)
- Brief business description
- Date you started operating in South Dakota
Alternatively, you can call the South Dakota Department of Revenue at 1-800-829-9188 to inquire about applying in person.
How to collect sales tax in South Dakota
- Charge the Correct Tax:
During checkout, add the appropriate sales tax (state and local combined) to the sales price of taxable goods and services. Some point-of-sale systems can automate this process.
- Collect the Tax:
Include the sales tax amount in your total price and collect it from the customer at the time of sale. You can accept payment for the total amount, including tax.
- Keep Records:
Maintain accurate records of your sales and the sales tax you collect. This includes details like the date, customer information, items sold, sales price, and the amount of sales tax collected.
How to get a sales tax permit/license in South Dakota?
Here’s how to get a sales tax permit/license (officially called a Sales Tax License) in South Dakota:
Online Application: The quickest and easiest way is to apply online through the South Dakota Department of Revenue website.
Alternatively: You can call the South Dakota Department of Revenue at 1-800-829-9188 to inquire about applying in person.
When are South Dakota’s sales tax returns due?
The due date for South Dakota sales tax returns depends on the frequency with which you file them, which in turn depends on your total sales tax liability. Here’s a breakdown:
- Monthly Filers: If your total sales tax liability is high enough, you’ll be required to file returns monthly. These returns are due by the 20th of the following month. For example, the January sales tax return would be due by February 20th.
- Quarterly Filers: If your sales tax liability falls within a certain range, you might be categorized as a quarterly filer. Quarterly returns are due by the last day of the month following the end of the quarter. So, the return for the first quarter (January – March) would be due by April 30th.
- Annually: Businesses with a very low sales tax liability may only need to file a sales tax return annually. These annual returns are due by January 31st of the following year.
Is anyone exempt from sales tax in South Dakota?
Yes, there are certain entities exempt from paying sales tax on their purchases in South Dakota. Here’s a breakdown:
- Government Agencies: Federal, state, and local government agencies are generally exempt from paying sales tax on purchases made for official government business.
- Certain Non-Profit Organizations: Qualifying non-profit organizations may be exempt from sales tax on purchases used exclusively for exempt purposes. Relief agencies and religious and private schools typically need to apply for exemption with the Department of Revenue.
- Merchants Purchasing for Resale: Businesses with a valid sales tax permit/license can purchase goods for resale tax-free by providing a resale certificate to the seller.
- Specific Purchases: Certain items may be exempt from sales tax, including prescription drugs, some groceries (excluding prepared food), and certain agricultural supplies.
