South Dakota Hiring More Tax Agents to Address Remote Seller and Marketplace Provider Noncompliance
South Dakota Dept. of Revenue’s Business Tax Division has received funding for additional sales and use tax Revenue Agents. These new Revenue Agents are to concentrate on unlicensed Remote Sellers and Marketplace Providers not complying with the Wayfair decision and to bring these businesses into compliance.
On June 21, 2018, The United States Supreme Court ruled 5-4 in South Dakota v. Wayfair that states can mandate that businesses without a physical presence in a state with more than 200 transactions or $100,000 in-state sales collect and remit sales taxes on transactions in the state.
The Secretary of Revenue testified to legislators that these new agents as needed due to widespread noncompliance by remote sellers and marketplace providers in obtaining sales tax licenses as required.
Legislators were also told that these new Revenue Agents will bring into the state extra three-quarters of a million dollars in new taxes their first year and every year after.
South Dakota Hired Additional Sales and Use Tax Auditors
These new Revenue Agents are in addition to the additional Auditors the South Dakota Department of Revenue was previously granted funding for to also concentrate on uncovering tax underpayments from remote sellers and marketplace providers.
Understand Your South Dakota Sales and Use Tax Liabilities
The key for businesses is to make sure that you work with someone that can help you fully understand your true South Dakota tax liabilities. This also included understanding your South Dakota use tax liabilities because use tax assessments can account for a significant part of an audit assessment. Even if you do not have a location in South Dakota, many businesses still have use tax liabilities.
State Tax Agents and Auditors Can Make Mistakes
At Dakota Business Tax LLC, we have had great success in reviewing South Dakota tax audits. Now, we cannot guarantee results, but we currently have a 100% success rate at lowering audit assessments. What this does tell us is that even the state can get it wrong. When state tax Auditors or Agents mistakenly assess tax on items or services which are not taxable, it can cause businesses to overpay their taxes for years after.
This also shows us why every South Dakota audit needs to be reviewed. Sometimes it is the auditor misinterpreting the law, and sometimes the auditor just did not ask the right questions to determine the taxability of an item or service.
It can be a challenge to determine what taxes a business truly owes. The taxability of products or services is not always as clear-cut as they appear to be. As a former South Dakota State Sales, Use, and Contractors’ Excise Tax Auditor for over 24 years, I bring an unparalleled understanding, expertise, and insight into the application of South Dakota tax law and South Dakota audit procedures.
Businesses paying extra tax dollars that they do not owe negatively impacts their profitability and puts them at a competitive financial disadvantage with their competitors. Your competitors can be putting their money into advertising, salary for a new salesperson, a new service truck, or upgrading their offices. All helping them gain new customers and generate more revenue.
Dakota Business Tax LLC is here to help
At Dakota Business Tax LLC, we can help ensure that what is being taxed is truly taxable, taxed under the correct tax laws, or what items can and should be removed. As a former state tax auditor, I know how to correctly explain how an item or service is used, so that the Auditor or Revenue Agent understands that an item or service is truly exempt from tax, so you are not paying taxes you do not owe. We do have contingency fee options.
Contact Dakota Business Tax LLC today at contact@dbtllc.com or call us at (605) 389-7345 to see how our South Dakota Audit Assistance & Defense and Consultation & Advisory services can help you, your business, or your clients, and to answer any questions that you may have.
