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South Dakota to Tax Remote Sales, May 2016


 Amazon will be required to collect South Dakota sales tax beginning May 2016.

Beginning May 1, 2016, certain remote sellers will be required to collect and remit South Dakota sales and use tax under newly enacted Senate Bill 106.

Why

South Dakota’s new policy is a bit different from those in other states, which typically claim that links on Internet websites or relationships with in-state businesses create click-through or affiliate nexus for certain remote sellers. SB 106 instead focuses on why remote sales tax collection is necessary for South Dakota. Reasons given include the following:

  • “The inability to effectively collect sales or use tax from remote sellers … is seriously eroding the sales tax base of this state.”
  • With no income tax, sales and use tax revenue is essential.
  • Remote sales are subject to use tax if not sales tax, but many sellers misleadingly market them as exempt.

Who

Not all remote sellers will be required to collect under South Dakota’s new law. The obligation is triggered for remote sellers when one of the following is true:

  • They earn an excess of $100,000 from South Dakota customers.
  • They make at least 200 sales of tangible personal property or services delivered or transferred electronically to South Dakota customers.

Read more about South Dakota’s new remote sales tax requirement here and at the South Dakota Department of Revenue website.

Sales tax software (SaaS) like Avalara AvaTax facilitates sales and use tax compliance in multiple states. Learn how it works.

photo credit: alles-schlumpf via photopin cc


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.