State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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South-Dakota (SD)

SD Sales Tax - Name of Tax and General Application:

South Dakota imposes a tax on the privilege of selling tangible personal property at retail and performing certain services in the state. This tax is known as a "sales tax". In addition there is a tax imposed on use, storage or consumption of tangible personal property purchased at retail within the state. This tax is known as a "use tax" and only applies where sales tax has not been paid.

SD Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Nexus is imposed by using South Dakota markets; that is, by soliciting sales via direct mail (including U.S. mail), sales catalogs, brochures, fliers, newspapers, magazines (whether regional or national), radio, TV, telephone, computer, or other similar advertising. Also, a single sale as a result of such advertising through an employee, agent, or independent contractor, or the sale of a warranty contract for on-site repair services results in nexus.

SD Local Tax - Do Localities Impose Tax?

Yes, South Dakota imposes local sales tax.

SD Resale Certificate Renewal Agreements:

Sales for resale are not taxable and are excluded from the taxable definition of "retail sale." An exemption certificate is required.

SD Resale Certificate Renewal Periods

Certificates are valid until the provider gives notice that the items or services being purchased are no longer exempt.

SD Statute of Limitations

Three years from the date the return was filed.