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South Dakota cautions against transient vendors

  • Jun 14, 2017 | Gail Cole

 Transient vendors must be sure to collect and remit South Dakota sales tax as required by law.

For many of us, start-of-summer rituals include trying on bathing suits and unearthing ice chests. The South Dakota Department of Revenue has a more unusual annual routine: forewarning South Dakotans about transient vendors.

Vendors pour into South Dakota spring through fall to sell everything from fruit and seafood to paintings and rugs. Not all transient vendors are engaged in nefarious activities, of course; many are perfectly legitimate. Yet every year, the Department of Revenue (DOR) and the Attorney General’s Consumer Protection Office caution residents to not engage in business with a vendor unless certain that vendor is “reputable.”

A reputable vendor has a business license and collects and remits sales tax on taxable sales, and consumers should request to see a vendor’s tax license before doing business. Doug Schinkel, director of the DOR’s business tax division, reminds, “If the vendor can’t or won’t provide proof of a South Dakota business tax license, you should contact the Department of Revenue.”

Services are subject to sales tax, too

While most other states impose sales tax on select services only, South Dakota taxes all services except those specifically exempt by statute. The DOR particularly cautions residents against transient vendors who provide construction or repair services. Consumers are advised to obtain the service provider’s permanent address and telephone number and to not pay for work in advance. Receipts should be provided for all work. Additional information.

Transient vendors take note

While “South Dakotans urged to take caution during transient vendor season” is directed toward consumers, it also contains an important message for transient vendors. After all, it is vendors who will be held liable for any uncollected tax owed, and vendors who will be charged applicable penalties and interest.

Although “reputable” transient vendors are welcome to do business in South Dakota any time of year, many head there for one event only: the Sturgis Motorcycle Rally. Anyone planning to be a vendor there this year has until July 1, 2017, to pre-register for a Temporary South Dakota Sales Tax License. First-time vendors need to post a $500 bond. Additional information is available from the South Dakota Department of Revenue.

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.