South Dakota Sales Tax Filing Update February 2019

What's changing in South Dakota?

South Dakota has passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective March 1, 2019.

  • Walmart has confirmed that they plan to begin this collection on 3/1/19.
  • Etsy has confirmed that they plan to begin this collection on 3/1/19.
  • Amazon has confirmed that they plan to begin this collection on 3/1/19.
  • As of February 14, 2019, we have not yet received confirmation that any additional carts currently supported as Marketplace Facilitators in TaxJar's Reporting plan to begin this automatic collection on 3/1/19.
  • We will update this article with more details as our research team receives more specific confirmation and guidance from the state's DOR as well as the currently supported Marketplace Facilitators.
  • You can view the state's guidance document here.

How does this affect me?

If you sell through a Marketplace that has agreed to begin collection in this state, you'll see sales tax collected in South Dakota for sales on and after March 1, 2019 on your TaxJar Dashboard and on your South Dakota Transactions page.

  • If you have never set up a filing frequency for South Dakota in your account's State Settings, our system will default the state to a monthly frequency and due date on your Dashboard after we see tax collected there. (We default to a monthly frequency and due date if you haven't yet adjusted any frequencies on your end, but the state itself would ultimately determine your exact filing frequency.) 
  • If you are currently opted in to receive email reminders for your sales tax due dates, you'll also see South Dakota listed as a state where you have an upcoming monthly return due in those emails.

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 creates 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 creates nexus in South Dakota, (physical, economic or otherwise) you will no longer need a license after March 1, 2019, according to the DOR. 

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.

How does this affect my TaxJar Report for South Dakota?

Your South Dakota Sales Tax Report will be updated in April 2019 (when sales tax returns for sales after March 1, 2019 are due) to specifically reflect sales that had tax collected and remitted by Marketplaces that are supported as Marketplace Facilitators in TaxJar Reports.