With all the focus on compliance with South Dakota sales tax laws, businesses need to be aware that when you meet the South Dakota criteria below, Remote Sellers and Marketplace Providers need to know South Dakota use tax laws because the state is not just issuing you a Sales tax license, but a Sales and Use Tax license.

As a state auditor, I would audit manufactures who were strictly wholesaling their products into South Dakota but had a South Dakota tax license. They had no sales taxable sales to report because all sales were for resale. Without any retail, warehousing/storage, or office locations in the state, most would report no use taxes. However, many had a use tax liability to South Dakota. Also, keep in mind that many services are taxable in South Dakota.

If you are a Remote Sellers and Marketplace Providers, contact us today at www.dbtllc.com/contact-us/ to discuss how we can help you in determining if you will also have a use tax liability to South Dakota. We also assist in evaluating if the products or services you provide are taxable or exempt in South Dakota, and the correct sales tax rates to apply. We also can help in determining if a customer claiming exemption from sales tax is truly an exempt entity.

Remote Sellers:

On November 1, 2018, remote sellers, even if they do not have a physical presence in South Dakota but meet one or both of the following criteria in the previous or current calendar year, will be required to obtain a South Dakota sales tax license and pay applicable sales tax. Excluded are the defendants in the South Dakota v. Wayfair case.

• Businesses with gross revenue from sales into South Dakota exceeds $100,000; or
• Businesses that had sales from deliveries into South Dakota of 200 or more separate transactions.

Marketplace Providers:

On March 1, 2019, marketplace providers that facilitate sales that meet one or both of the following criteria in the previous or current calendar year, will be required to obtain a South Dakota sales tax license and pay applicable sales tax.

• Gross revenue from facilitated sales into South Dakota exceeds $100,000; or
• 200 or more transactions from facilitated sales are made into South Dakota.

Market Providers:

Fulfillment Service: Connecting sellers to buyers and handles all transactions such as warehousing, order, payment, and shipping.

Facilitator: Connecting sellers to buyers and processing orders and payments. This type of marketplace seller is usually responsible for shipping the product.