This blog was last updated on June 30, 2026
South Dakota Sales Tax Rates (2026)
South Dakota imposes a statewide sales and use tax rate of 4.2%. In addition to the statewide rate, local jurisdictions may levy additional local sales taxes of up to 2%, making it important for businesses to understand applicable South Dakota tax rates based on where sales occur.
Whether you operate a physical storefront or manage South Dakota online sales tax obligations as a remote seller, understanding South Dakota sales tax laws is essential for maintaining compliance.
What’s Taxable in South Dakota?
South Dakota sales and use tax applies to the sale of tangible personal property and most services. Sellers selling taxable goods and/or services are required to collect and remit sales tax to the state.
Examples of taxable items and services include:
- Clothing
- Prewritten computer software
- Non-prescription medical items or drugs
- Telecommunication services
- Certain installation or repair services
- Software as a Service (SaaS)
Sales Tax Nexus in South Dakota
A seller is liable to collect and remit South Dakota sales tax if they meet the state’s nexus requirements. Nexus can be established through either physical or economic presence.
South Dakota: Physical Nexus
Physical presence is created by having a business location, office, warehouse, vehicle, employee, or other representative operating in the state of South Dakota.
South Dakota: Economic Nexus
South Dakota enforces economic nexus for remote sellers. If your business has more than $100,000 in sales in South Dakota during the previous or current calendar year, you may be required to register for and collect South Dakota sales tax.
Learn more on the South Dakota Sales and Use Tax webpage.
South Dakota Sales Tax Exemptions
Certain sales in are considered generally exempt from the state’s sales and use tax requirements.
Exempt Products and Services
- Certain agricultural items and services
- Health services
- Prescription medical equipment and drugs
- Financial services
Entity- or Use-Based Exemptions
Additionally, South Dakota exempts sales to certain entities from the sales/use tax, including:
- Certain qualified nonprofit entities
- Retailers selling for resale
- Select agriculture producers
- Schools
- Government
- Native American tribes
How to Claim Sales Tax Exemption in South Dakota
To claim a sales tax exemption in South Dakota, an entity must provide a valid exemption certificate at the time of sale. The state uses a single exemption certificate form for this purpose.
Additional guidance on South Dakota exemption certificates is provided by the Department of Revenue.
South Dakota Filing and Remittance Requirements
South Dakota requires electronic filing for businesses remitting sales and use tax. Businesses generally file using Form 2032 and may be required to file monthly unless otherwise directed by the state Department of Revenue.
Frequently Asked Questions
Is South Dakota a part of the Streamlined Sales Tax (SST) initiative?
Yes. South Dakota is a member of the Streamlined Sales Tax (SST) initiative, which aims to simplify and standardize sales tax administration across participating states. More information concerning SST may be found here.Does South Dakota have sales tax holidays?
Does South Dakota have sales tax holidays?
No, South Dakota does not currently offer sales tax holidays.
Does South Dakota apply sales tax to shipping charges?
Generally, South Dakota applies sales tax to shipping charges when the underlying product being shipped is taxable.
For sourcing sales tax, is South Dakota origin or destination based?
South Dakota is a destination-based sales tax state, meaning sales tax rates are determined based on the delivery location of the product or service.
Can I use the Simplified Electronic Return (SER) in South Dakota if I’m not in the SST Model 1 program?
Yes. South Dakota accepts Simplified Electronic Returns (SER) from sellers and tax providers capable of transmitting returns properly, even if they are not part of the SST Model 1 program.
How do I register for a South Dakota sales tax license?
You can register for a South Dakota sales tax license using the state’s online Tax License Application portal.
Additional Resources
For more information on U.S. sales tax compliance across all 50 states, check out our: