Running a business in South Dakota? Whether you own a boutique in Sioux Falls or a café in Rapid City, keeping up with sales tax is part of doing business in the state. South Dakota makes it pretty straightforward, but it’s still important to know what’s taxable, how to register, and when to file. This guide will walk you through everything you need to know to stay compliant and help you save time when it comes to managing your sales tax.
Does South Dakota have sales tax?
Yes. South Dakota charges a state sales tax on most retail sales, leases, and rentals of tangible personal property, as well as certain services. In addition to the state sales tax, many cities in South Dakota also impose their own local sales taxes, which are collected at the same time.
Sales and use tax on Native Land
Several South Dakota tribes have tax agreements with the state, including the Cheyenne River, Crow Creek, Oglala, Rosebud, and Standing Rock Sioux Tribes. These agreements make sure sales and use taxes on tribal lands follow the agreed rates and exemptions.
If your business operates on these lands, you’re responsible for collecting and remitting tax. All taxes are reported using a special code on your state return and are shared between the state and the tribe. For additional information, refer to South Dakota’s Department of Revenue’s website on sales tax within Indian Country.
What is the South Dakota sales tax rate?
South Dakota has a state sales tax rate of 4.2%. On top of that, many municipalities add their own local sales tax, generally between 1% and 2%, making total rates vary by city. For example:
- In Rapid City, the combined sales tax rate is 6.2% (4.2% state and 2.0% city).
- In Sioux Falls, the total rate is also 6.2% (4.2% state and 2.0% city).
For a full list of cities that charge local sales tax and their current rates, visit the South Dakota Department of Revenue (DOR) website.
How to calculate South Dakota sales tax?
For most South Dakota retailers and restaurants, calculating sales tax is a regular part of doing business. The state has a base rate that applies to all taxable sales, and many cities add their own local rate on top of that. To find the total, simply multiply the sale amount by the combined rate.
For example, if a customer spends $10 at your café in Sioux Falls, where the total sales tax rate is 6.2%, you’d collect $0.62 in tax, bringing the total to $10.62.
If you operate in multiple locations or even just have a busy point-of-sale system that handles hundreds of transactions a day, it’s crucial to charge the correct rate every time. You can check local rates using the South Dakota DOR’s tax lookup tool to make sure you’re compliant in every city.
DAVO by Avalara automatically calculates and sets aside the exact amount of sales tax from each sale, so whether you’re running a packed restaurant in Rapid City or a boutique in Sioux Falls, your tax funds are always accurate and ready to file.
Use our sales tax calculator
If you want prices to include sales tax (for example, menu prices at restaurants), our reverse sales tax calculator can help you determine how much of the total sale is tax versus revenue. In the calculator below, simply enter the sales tax and the desired final price to determine the pretax value.
What is subject to sales tax in South Dakota?
In South Dakota, sales tax applies broadly to most retail transactions. If you’re selling tangible goods or taxable services, chances are your sales are subject to tax. This includes retail sales of tangible personal property, hotel stays, admissions to venues, and certain services. The state also imposes a use tax on products and services when sales tax wasn’t collected at the time of purchase, ensuring that all taxable transactions are treated fairly. For more details, visit the state’s Department of Revenue site for their guide on sales and use tax.
South Dakota sales tax on food
South Dakota is one of the few states that taxes groceries. Food for home consumption is not exempt from the state’s sales tax. Prepared foods and beverages sold by restaurants are also taxed at the same rate, unlike some states where restaurant meals are taxed at a higher rate.
For grocery stores and restaurants, keeping track of taxable and exempt items can quickly become complicated, especially with high transaction volumes and multiple POS systems. DAVO automatically sets aside, files, and pays your sales tax on time, so you can focus on serving customers and running your business, not managing tax deadlines.
Does South Dakota charge sales tax on services?
Yes, unlike many other states, South Dakota taxes most services. This means many professional and personal services, such as legal, salon, and repair work, are subject to the same sales tax rate as goods. If your business provides taxable services, you’ll need to collect and remit sales tax just like a retailer would on product sales.
Make your sales tax less taxing with DAVO.
How to apply for a South Dakota sales tax license?
Before making any taxable sales in South Dakota, businesses must obtain a sales tax license. You can apply online through the South Dakota Department of Revenue website. During the application, you’ll need to provide details such as your business name, ownership type, federal EIN or Social Security number, and business location.
Most applications are processed within a few days when submitted online. If you prefer to file by paper, you can download and mail a completed Sales Tax License Application to the South Dakota DOR, though processing may take longer.
How to file South Dakota sales tax?
South Dakota requires businesses to file sales tax returns regularly, even if no sales were made during the reporting period. Most businesses file and pay through the South Dakota EPath system, the fastest and easiest way to manage your account online.
When you log in, you’ll select the correct filing period, enter your gross sales, deductions, and taxable amounts, and then the system will automatically determine how much tax you owe. Once you confirm the return, you can submit payment directly through EPath along with your return.
If you prefer, you can still file by paper using the forms provided by the Department of Revenue, though electronic filing is strongly encouraged. Paper returns should be mailed to the South Dakota Department of Revenue, 445 East Capitol Avenue, Pierre, SD 57501, and must be postmarked by the due date to be considered on time.
How to pay South Dakota sales tax?
Once your return is filed, you can pay your South Dakota sales tax through EPath, the state’s online filing and payment system. Payments can be made by ACH debit, ACH credit, or credit card (Visa, Mastercard, or Discover).
If you want to mail your payment, you can send a check to the Department of Revenue, Anderson Building, Mail Stop 5055, Pierre, SD 57501. Cash payments should not be sent through the mail, but are accepted in person at a Department of Revenue office. It’s best to meet with an agent to complete your cash payment.
What are South Dakota sales tax due dates?
In South Dakota, sales tax returns are due by the 20th of the month following the reporting period, no matter how often you file. For example, a return for January is due by February 20.
If you file by paper, your payment is due at the same time as your return. Returns filed after the due date may be subject to penalties and interest. For electronic filers, once you complete your return in EPath, you’ll be prompted to schedule your payment. Electronic payments are due on or before the 25th of the month. If a due date falls on a weekend or legal holiday, the next business day becomes the due date. Refer to South Dakota’s Department of Revenue for upcoming sales tax due dates.
Tax Collection Allowance
South Dakota previously offered a tax collection allowance to businesses that filed and paid electronically on time, equal to 1.5% of the tax due, capped at $70 per return period. However, this allowance is suspended from July 1, 2025, through June 30, 2028.
During this suspension period, no vendor discount is available, even for electronic filers. If you operate in multiple states, check out our state-by-state vendor discount guide to see where you might still qualify for a sales tax collection allowance. With DAVO, this collection allowance is returned to the business in full, sometimes covering the full subscription cost to DAVO.
What are the South Dakota sales tax penalties for filing late?
If you miss a filing or payment deadline, South Dakota charges both penalties and interest on your overdue tax balance.
A 10% penalty is applied if your return isn’t received within 30 days after the due date, with a minimum penalty of $10, even if no tax is due. In addition, a 1% interest charge accrues each month on any unpaid tax until it’s paid in full. The minimum interest charge is $5 for the first month.
When payments are received, they’re first applied to your oldest unpaid tax, followed by any outstanding interest, and finally to penalties, ensuring your oldest obligations are cleared first.
How DAVO can help with South Dakota sales tax
Keeping up with South Dakota’s sales tax filing and payment rules can take valuable time away from running your business. DAVO automates the entire process, from daily sales tax collection to filing and payment, so you never have to worry about missing a deadline or calculating penalties again. Whether you operate a busy restaurant in Sioux Falls or a retail shop in Rapid City, DAVO ensures your sales tax is set aside daily and automatically paid to the South Dakota Department of Revenue when due.
Choose your POS system to get started with DAVO.
South Dakota Department of Revenue Information:
(800) 829-9188
