South Dakota Sales & Use Tax 2025
South Dakota Sales Tax Guide for SaaS and E-Commerce Businesses 2025
2025-09-18
South Dakota imposes a 4.2% state sales tax on taxable sales. Municipalities may impose local sales/use tax of 1%–2%, for a combined rate up to 6.2%. See: Sales & Use Tax and the municipal overview: Municipalities.
This guide explains South Dakota’s treatment of SaaS (vendor-hosted software), digital products, economic nexus, marketplace facilitators, sourcing, and filing rules, with citations to South Dakota statutes and official guidance.
Last updated: September 2025
Quick Reference: South Dakota Sales & Use Tax (2025)
| Topic | Details |
|---|---|
| State base rate | 4.2% (Sales & Use Tax) |
| Local rates | 0%–2% municipal sales/use tax where the buyer receives the product/service. (Municipalities) |
| Economic nexus | $100,000 in South Dakota sales in the current or previous calendar year (no transaction count). (Remote Seller Bulletin) |
| SaaS / Cloud | Taxable as products transferred electronically, including temporary access (vendor-hosted software). (Products Transferred Electronically) |
| Digital products | Taxable whether downloaded or accessed online (e-books, music, video, etc.). (Products Transferred Electronically) |
| Delivery/Shipping | Taxable when part of a taxable sale (included in “sales price”). (Delivery Charges) |
| Sourcing | Destination-based: tax where the customer receives the product/service. (Sales & Use Tax Guide via “Determine the location of the sale”) |
| Filing due date | Returns due on the 20th of the month following the reporting period. (DOR Calendar) |
| Registration | Register via Streamlined Sales Tax (SST) or South Dakota EPath. (Remote Seller Bulletin; EPath) |
SaaS & Software Taxability in South Dakota
South Dakota taxes software and access to software regardless of delivery method:
-
Vendor-hosted software / SaaS: Charges for remotely accessing software (temporary or ongoing access) are taxable as products transferred electronically.
Source: Products Transferred Electronically -
Downloaded software: Taxable whether delivered on media or electronically.
Digital Products
South Dakota taxes digital products (e.g., e-books, music, movies/video), whether the customer downloads the item or accesses/streams it for temporary use.
Sources: Products Transferred Electronically
E-Commerce & Tangible Goods in South Dakota
| Category | Taxable? | Notes / Authority |
|---|---|---|
| Tangible personal property | Yes | 4.2% state + up to 2% municipal. Sales & Use Tax |
| Prewritten software (downloaded or load-and-leave) | Yes | Taxable regardless of delivery method. |
| SaaS / vendor-hosted software | Yes | Taxable as products transferred electronically (temporary/permanent access). Products Transferred Electronically |
| E-books, music, video (downloaded or streamed) | Yes | Digital products are taxable. |
| Shipping / delivery / handling | Yes | Included in the taxable “sales price” when part of a taxable sale. Delivery Charges |
Who Must Register and Collect South Dakota Sales Tax?
You must register and collect if you have:
- Physical nexus, or
- Economic nexus: $100,000 in gross revenue from South Dakota sales in the current or prior calendar year.
Source: Remote Seller Bulletin
Marketplace facilitators must collect and remit when the threshold is met.
Source: Remote Seller Bulletin
Sourcing & Local Tax
South Dakota uses destination sourcing. For delivered goods/services (including digital delivery and access), tax is based on where the customer receives the product/service; municipal tax (1%–2%) applies if the receipt/use is within a taxing city.
Sources: Sales & Use Tax Guide – “Determine the location of the sale”; Municipalities
Filing & Due Dates
- Register & file: Use EPath (or SST for multi-state registration).
Sources: EPath; Remote Seller Bulletin - Filing frequency: Monthly by default; quarterly/annual may be approved for low volume.
Source: Sales & Use Tax - Due date: Returns are due by the 20th of the month following the reporting period.
Source: DOR Calendar
How to Register for South Dakota Sales Tax
- Determine nexus (physical or $100,000 economic nexus).
- Register via SST or South Dakota EPath.
- Charge the correct rate: 4.2% state + municipal rate (if applicable).
- File & pay by the 20th.
FAQs: South Dakota Sales Tax
Is SaaS taxable in South Dakota?
Yes. Remotely accessed/vendor-hosted software (temporary or permanent access) is taxed as products transferred electronically.
Source: Products Transferred Electronically
Are digital products (e-books, music, video) taxable?
Yes. Digital products are taxable whether downloaded or accessed online.
What is South Dakota’s economic nexus threshold?
$100,000 in sales into South Dakota (no transaction threshold).
Source: Remote Seller Bulletin
Are shipping and delivery charges taxable?
Yes. Delivery/handling are included in the taxable sales price when part of a taxable sale.
Source: Delivery Charges
Official South Dakota Resources
- Sales & Use Tax (overview & rates)
- Economic Nexus / Marketplaces
- Software & Digital Products
- Local/Municipal
- Registration & Filing
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