South Dakota to Tax Remote Sales, May 2016
- Mar 29, 2016 | Gail Cole
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.
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.
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.
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