Investor Presentaiton

Sales Tax The sales tax applies to the gross receipts of all retail sales, including the sale, lease, or rental of personal property or any product transferred electronically, and the sale of services. A business must report and pay sales tax on its gross receipts from the sale of a product or service unless: They receive an exemption certificate from the buyer stating: ⇒the purchase is intended for resale; ⇒the purchase is intended for an exempt use; or South Dakota law allows the seller to add the tax to the price of the product or service. However, the seller is liable for the sales tax due, whether or not it is collected. ⇒the sale is to an exempt entity, such as South Dakota state or local governments; • The product or service is specifically exempt by law; or • The service is a construction service taxed in chapter 10-46A or 10-46B. See the Contractor's Excise Tax Guide for information on tax applied to construction services. Determine the location of the sale Sales tax applies where the customer receives the product or service. Products picked up at the seller's location are subject to sales tax at that location. . • • • • Products delivered are subject to sales tax where delivered. Delivery may be by the seller or by a transportation company hired by the customer. If the product is delivered, but the delivery address is unknown, sales tax applies based on the customer's address. For products transferred electronically, if there is no delivery or customer address on file, sales tax applies based on where the product is first available for transmission by the seller. Products delivered to a location outside South Dakota are not subject to South Dakota sales tax, but may be subject to that state's tax. Remote Sellers As of November 1, 2018, remote sellers who meet certain thresholds must obtain a South Dakota sales tax license and pay applicable sales tax. Who this impacts Location of Sale Examples: Personal care services are taxed at the location the service is performed, which is the same location where the customer receives the service. This includes any service performed on the physical human body, such as haircuts or massages. Services performed on products are taxed at the location the product is delivered to the customer. This includes services such as repair services. Lease or rental of products is taxed where the customer receives the product. However, if the product is moved to another location, sales tax on future payments applies at that location. For more information on South Dakota's remote seller law, visit our website or check out our Remote Seller Bulletin. South Dakota law requires any business without a physical presence in South Dakota to obtain a South Dakota sales tax license and pay applicable sales tax if the business meets one or both of the following criteria in the previous or current calendar year: • Your business's gross revenue from sales into South Dakota exceeded $100,000; or • Your business made sales for delivery into South Dakota in 200 or more separate transactions. * Gross sales or transactions including selling, renting, or leasing products or services (including products delivered electronically) into South Dakota. (SDCL ch. 10-64) Note: Any business with a physical presence in South Dakota is required to be licensed for sales tax collection. These minimum thresholds do not apply to any business with a physical presence in South Dakota. South Dakota Retailers Each state's remote seller taxation laws are different. If you sell products or services to be used in other states, you may be required to pay sales tax in that state. You can access more information on other states' laws and contact information by visiting US Departments of Revenue by State. We also encourage you to visit the https://www.streamlinedsalestax.org/ to view collection requirements from the 24 member states. You can also register for tax collection through the Streamlined Sales Tax Project. South Dakota Department of Revenue ⚫ Sales and Use Tax Guide • January 2022 . 5

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