The increase of online shopping and below estimated income from sales tax has been a hot topic in South Dakota. If you are unaware, a business that does not have a physical presence in the state (store, warehouse, or sales reps) is not required to be licensed in South Dakota to collect sales tax. This gap is hurting the local economy as local businesses lose money from sales, but are still paying their taxes. While use tax is not new – it may be something you were unaware was your responsibility.
Use tax becomes your responsibility when you either go out of state, online or use a catalog to make a purchase that doesn’t collect sales tax, or is lower than SD rate of 4.5%. Use tax can be paid using the form attached below and either mailing or dropping off the form with payment to your local Revenue office.
If you have any questions please click the link below to South Dakota Department of Revenue fact sheet or give us a call at 225-7279.