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South Dakota State Sales Tax Rate to Increase

  • Mar 4, 2016 | Gail Cole

 South Dakota state sales tax rate, June 1, 2016.

It wasn’t easy, but lawmakers from both sides of the aisle in South Dakota have approved legislation that raises state taxes in order to provide pay increases to teachers in public schools and state technical institutions. The bill also makes it easier for teachers certified in other states to teach in South Dakota.

House Bill 1182, introduced at Governor Dennis Daugaard’s urging, increases the state sales and use tax rate by 0.5% (from 4% to 4.5%). The increase also applies to the following:

  • Amusement device tax
  • Excise tax on farm machinery

This is noteworthy. The South Dakota state sales and use tax rate has not been increased since the middle of the last century. It is expected to generate more than $100 million in the next fiscal year.

Eying remote sales tax revenue

The bill also stipulates,

“If the state is able to enforce the obligation to collect and remit sales tax on remote sellers who deliver tangible personal property, products transferred electronically, or services directly to the citizens of South Dakota, the additional net revenue from such obligation shall be used to reduce the rate of certain taxes.”

This is an optimistic outlook, given the fate of federal remote sales tax legislation thus far. Then again, a vote on remote sales tax has been promised this year.

The rate increases take effect on June 1, 2016.

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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.