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Effective July 1, 2008, South Dakota revised provisions apply sales and use tax to all sales, leases, or rentals of any product transferred electronically if (1) the sale is to an end user, (2) the sale is to a person who is not an end user, unless otherwise exempted, (3) the seller grants the right of permanent or less than permanent use of the products, or (4) the sale is conditioned or not conditioned upon continued payment. (2008 SD H 1017, Enacted, February 20, 2008).

(03/30/2008)

If a seller has not obtained an exemption certificate or all relevant data for exemption certificates for South Dakota sales and use tax, the seller may, within 120 days following a request for substantiation, either prove that the transaction was not subject to tax or attain a fully completed exemption certificate from the purchaser; effective July 1, 2007. The Department of Revenue need not consider any exemption certificate presented after the 120 days. (H.B. 1055, Laws 2007)

(04/16/2007)

A South Dakota Department of Revenue and Regulation publication discusses the sales and use tax liability of an architect’s purchases of blueprints for resale to the owner of the project. There are no South Dakota provisions allowing a service provider to purchase a tangible personal property for resale; therefore, architects providing a service may not purchase blueprints for resale. However, if the architect sells blueprints and does not provide client services, such as design or modifications, then the copies can be purchased for resale as tangible personal property. (Taxation, Vol. 7 No. 1, South Dakota Department of Revenue and Regulation, January 2007)

(04/13/2007)

On February 11, 2005 the South Dakota Senate introduced Concurrent Resolution No. 5, which would urge Congress to sponsor and support the Streamlined Sales and Use Tax Agreement. The Senate’s argument for the Agreement is based upon revenue losses as a result of the physical presence requirement set in Bellas Hess and Quill Supreme Court decisions. Studies have shown that South Dakota lost considerable tax revenue in 2003 due to their inability to collect tax on remote sales, including sales over the internet. Revenue losses are expected to increase to $88.6 million by 2008. Although a voluntary streamlined sales and use tax system would likely boost tax revenue by $2 million to $3 million, the Senate does not believe that tax revenue losses from remote sellers will be fully recovered until South Dakota, as a member of the Agreement, can require remote sellers in complying states to collect and remit South Dakota taxes. (Concurrent Resolution No. 5, South Dakota Senate, introduced February 11, 2005)

(03/24/2005)

The South Dakota Governor has signed H.B. 1142, which provides for certain fabricators to apply for a sales and use tax refund. The bill, which becomes effective July 1, 2005, states that a contractor or subcontractor licensed pursuant to Chapter 10-46A or 10-46B may apply for a refund of South Dakota sales and use tax paid by such contractor if the following conditions are met: (1) the sales and use tax subject to the refund request was paid by the contractor or subcontractor requesting the refund for the use of tangible personal property; (2) the tangible personal property upon which the sales and use tax was paid was purchased by the contractor or subcontractor requesting the refund; (3) the tangible personal property upon which the sales and use tax was paid was fabricated by the contractor or subcontractor in South Dakota; (4) the fabricated tangible personal property was used outside of South Dakota by the contractor or subcontractor in the performance of a contract; (5) the fabricated tangible personal property is not returned to South Dakota; and (6) the fabricated tangible personal property is exempt from sales or use tax in the state where the contract is performed. The bill further states that the refund claims shall be submitted on a form prescribed the Secretary of the Department of Revenue. (H.B. 1142, South Dakota Department of Revenue and Regulation, effective July 1, 2005)

(03/10/2005)

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