Investor Presentaiton
Marketplace Providers
As of March 1, 2019, marketplace providers who meet certain thresholds
must obtain a South Dakota sales tax license and pay applicable sales tax on
behalf of their marketplace sellers.
Who this impacts
For more information on types of
marketplace providers, frequently
asked questions, and more, visit the
Marketplace Tax Fact.
Marketplace providers are required to remit sales tax on all sales it facilitates into South Dakota if it 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
The marketplace will remit sales tax if any of the thresholds are met. If a marketplace is remitting the sales tax, the SD
business will not be responsible for sales tax remittance on sales through that marketplace.
Use Tax
South Dakota state and municipal use tax applies to all products and services when the applicable sales tax is not
collected.
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The use tax rate is the same as the sales tax rate. The use tax is due on the purchase price, including freight and
handling charges.
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Use tax is due in the filing period in which the product or service is received.
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Use tax is also due on supplies taken out of retail inventory for the business's use.
The tax rate is based on the location where the product or service
used.
When you purchase a product or service out-of-state, the seller may legally charge the state's sales tax. You will receive
credit for tax legally due in another state when you bring the product or service back to South Dakota.
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If the other state's sales tax is the same or more than South Dakota's tax, there is no South Dakota use tax owed.
If it is less than South Dakota's, the difference must be paid to South Dakota.
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The state plus applicable municipal taxes must be added together to determine if additional tax is due.
Examples of Use Taxable Items:
Examples of when South Dakota sales tax may not
Computers
Demonstration and
Manufacturing
equipment
have been charged and use tax is due:
When items are purchased from an out-of-state seller
sample items
.
Donations
Meals furnished for
employees
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When untaxed retail inventory is removed for the
business's or personal use
Equipment brought
·
Promotional gifts
•
into South Dakota
Services
from another state
·
Software & support
Farm equipment
·
Snow removal
Office supplies
●
Tools
Leases of
equipment
When a product purchased from an out-of-state seller is
delivered in South Dakota, but the other state's tax is
incorrectly charged
When a purchase is made in another state then brought
into South Dakota and the product was not taxed or was
taxed at a lower tax rate than applies in South Dakota,
you owe use tax
6
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January 2022 • Sales and Use Tax Guide
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South Dakota Department of RevenueView entire presentation