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South Dakota: Online Purchases Subject to Use Tax


If South Dakotans think they'll save a few tax dollars by doing their holiday shopping online this year, they need to think again. The South Dakota Department of Revenue issued a notice late last month reminding holiday shoppers that "state and municipal use tax may be due on their purchases." 

The assumption is that "many consumers don't realize that most Internet retailers are not collecting sales tax on online sales." While some savvy shoppers may intentionally shop remotely to avoid paying state sales tax, most shop online because it's more convenient to do so. Furthermore, many people aren't aware of their use tax obligations, even if they realize they aren't paying sales tax.

States want that lost tax revenue more than ever now, thanks to budget shortfalls. As a result, more and more states are reminding residents of their use tax obligations. In South Dakota, use tax applies to such items as "magazine subscriptions, books, clothes, computers and computer services, jewelry," and more.

South Dakota's use tax rate is 4%, like the state sales tax rate. The South Dakota DOR reminds that "[m]unicipal tax may also be due based on where the purchaser receives the goods."

Additional South Dakota use tax information is available at the state Business Tax Division.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.