South Dakota Sales Tax Update: Marketplace Facilitator Laws
South Dakota passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective March 1, 2019.
Amazon, Etsy, and Walmart began collecting on March 1, 2019.
eBay began collecting on July 7, 2019.
In this article, we summarize South Dakota's state guidance on the following questions:
- Do I need to register for a sales tax license in South Dakota?
- Should I cancel my existing registration if all my sales are marketplace-collected?
- Do I need to collect sales tax on South Dakota sales on non-marketplace platforms?
- Do I still need to file returns in South Dakota?
- How do I file without paying double tax on the sales that were collected and remitted by my Marketplace?
I've never registered for a South Dakota license. Do I need to register for a sales tax license in South Dakota now?
If you are a retailer with a physical presence in South Dakota or you are a remote seller who has crossed the economic nexus threshold for South Dakota ($100,000/year in gross revenue, or more than 200 separate sales transactions in South Dakota in the current or last calendar year), then you will need to register for a South Dakota sales tax license.
If you have never registered for a sales tax license in South Dakota and your only sales in South Dakota are through a Marketplace and your Marketplace Facilitator collects and remits sales tax on your behalf in this state, you will NOT need to register for a South Dakota sales tax license after March 1, 2019.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
- If you do not meet any of the criteria that create nexus in South Dakota (physical, economic or otherwise), you won't need to register for a sales tax license in this state.
I have already registered for a license in South Dakota but and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
If you do not meet any of the criteria that create nexus in South Dakota, (physical, economic or otherwise) you will no longer need a license after March 1, 2019, according to the DOR.
- You'll need to work with the state directly to cancel your existing license.
Do I need to collect taxes on my South Dakota sales on other platforms?
Yes--if you have nexus in the state (physical or economic) and you make sales to customers in South Dakota on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the South Dakota orders that are processed on the other platforms.
Do I still need to file returns in South Dakota?
Yes--once you register for a license, you will be required to file a return based on the frequency the state has assigned you.
- If you've previously registered, the state expects you to remain registered and continue to file returns (even if you are filing a $0 return).
I still need to file returns in South Dakota. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
When you file, you'll need to report the sales made through any Marketplace that is collecting on your behalf as non-taxable sales.
- If all of your sales are Marketplace sales, once you deduct the marketplace sales, you will need to file a $0 return.
- If you make sales on other platforms in addition to the Marketplace, you'll need to make sure you remit the tax you collected for those sales when you file.
- If you're enrolled in AutoFile for South Dakota, our system will handle the Marketplace sales deduction process automatically.