Investor Presentaiton
Gross Receipts
Gross receipts means the total amount of money or other consideration the seller receives for products or services sold,
leased, or rented. Consideration may include cash, credit, property, or services.
More information is available in the Gross Receipts Tax
Fact.
A seller may not deduct the following from their gross
receipts:
Visit our Tax Facts for more information on various
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The seller's cost of the product or service sold;
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topics:
https://sddor.seamlessdocs.com/sc/publications-tax-facts/
The seller's expenses such as the cost of materials, labor, interest, losses, transportation, or taxes imposed on the
seller; and
Charges by the seller for services necessary to complete the sale, including delivery charges. Construction
services taxed in chapter 10-46A or 10-46B are not subject to sales tax.
Gross receipts include consideration received from third parties if the following four criteria are met:
A. The seller actually receives consideration from a third party that is directly related to a discount on the sale;
B. The seller has an obligation to pass the discount through to the purchaser;
C. The amount of consideration on the sale is set by the seller at the time of the sale to the purchaser; and
D. One of the following criteria is met:
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The purchaser provides a coupon, certificate, or other document to the seller to claim the discount and the
document is authorized, distributed, or granted by a third party with the understanding the third party will
reimburse the seller for the coupon;
The purchaser provides documentation that he is a member of a group entitled to a discount; or
The discount is identified as a third party discount on the invoice given to the purchaser or on the
documentation presented by the purchaser.
Gross receipts do not include:
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Discounts that are not reimbursed by a third party. This may include cash discounts, early payment discounts, or
store coupons;
The sale price of property returned by purchaser if the full sale price is refunded in cash or by credit; and
Credit allowed for products taken in trade as
a part payment of a taxable retail sale when
the product taken in trade is subject to sales
tax.
The following are not included in the gross
receipts when separately stated on the invoice or
documentation provided the purchaser:
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Interest, financing, and carrying charges
from credit extended on the sale of
products or services;
Any taxes legally imposed directly on the
purchaser; and
Examples:
1. If a business collects $100 plus $4.50 in sales tax ($100 x
4.5% sales tax rate = $4.50).
The business reports $100 gross receipts and owes
$4.50 sales tax.
2. If a business collects $100 and the document says tax is
included.
The business reports $95.69 as gross receipts and owes
$4.31 sales tax ($100 ÷ 1.045 = $95.69).
Any fees or other interest imposed for late charges on overdue accounts, no account, or insufficient funds
checks.
Sales tax is not included in the gross receipts if itemized
or documentation shows the tax is included in the sales
price.
Returned Merchandise
The amount credited to the customer for returned
merchandise is reported as a non-taxable sale on the
tax return during the reporting period the item is
credited.
Delivery Charges
Delivery charges are the charges by the seller for preparation
and delivery to a location designated by the purchaser of
product or services. Delivery charges include shipping,
postage, handling, crating, packing, and fuel surcharge.
Delivery charges are included in the gross receipts and are
subject to the same sales or use tax rate as the product or
service. If the product or service is not taxable, the delivery
charge is not taxable.
South Dakota Department of Revenue ⚫ Sales and Use Tax Guide • January 2022 • 7View entire presentation