South Dakota helped create a new standard for economic nexus threshold with the groundbreaking South Dakota v. Wayfair, Inc. decision. Following that case, almost the entire country has followed suit and worked on adjusting how they collect and remit sales tax. Not every state or territory has completely mimicked South Dakota, and remote sellers in other areas will need to stay current on other requirements. But the South Dakota economic nexus threshold is definitely a common blueprint, which we have outlined below.
November 1, 2018.
$100,000 or 200 transactions.
Threshold applies to the previous or current calendar year.
The selling, renting, or leasing products or services (including products delivered electronically) into the state.
When You Need to Register Once You Exceed the Threshold:
Next transaction if in the current year, or if met in the previous year, by the following calendar year.
Summary: Remote sellers are required to collect South Dakota sales tax if they exceed 200 or more separate transactions into South Dakota in the current or previous calendar year or if their gross revenue from sales, rents or leases into South Dakota exceeds $100,000 in the current or previous calendar year. Similarly, marketplace facilitators must collect South Dakota sales tax if they exceed 200 or more separate transactions into South Dakota in the current or previous calendar year or if their gross revenue from sales, rents or leases into South Dakota exceeds $100,000 in the current or previous calendar year.
Any business with a physical presence in South Dakota, regardless of the number of transactions or gross revenue is required to hold a sales tax license, collect sales tax and file a return. Businesses that obtain a license will be notified of their filing frequency by the South Dakota of Revenue.
South Dakota Sales Tax Resources: Reach out to our team to see how the South Dakota economic nexus threshold impacts your business. Also, be sure to visit our interactive sales tax nexus map for the latest news on how other states are adjusting.