Sales tax on services in South Dakota

What this site covers

South Dakota taxes services, and it taxes almost all of them. The state rate is 4.2% on the sale of services, and most cities add 1 to 2% on top. But what your business actually owes depends on the trade you work.

An electrician wiring a new building owes no sales tax on that job, because realty improvement work is taxed differently. A food truck pays 4.2% plus city tax plus the 1% municipal gross receipts tax. A salon owner owes tax on every chair's receipts, unless the chair is rented out.

That variation is the reason this site exists: the answer is a permutation, not a reference article. Every figure comes from the Department of Revenue and the Secretary of State.

Which trades get their own answer

Six trades are worked through in full, each against the state's own publications. Electrical work mostly falls under the contractor's excise tax, a different levy with a different return. Food trucks answer the prepared food question before pricing a single item.

Salons and barber shops split on whether a chair is staffed or rented. Landscaping splits on whether the job is lawn care or a realty improvement. Cleaning businesses owe use tax on supplies and may have exempt customers. Moving companies tax the move, the delivery charge and the storage month.

If your trade is not on that list, start with the trade whose work most resembles yours, then check the rates.

The rates and who must register

The rates worth memorizing: 4.2% state, 1 to 2% municipal, 1% municipal gross receipts on eating and lodging, 2% contractor's excise. The rates page lays them out with what each attaches to.

A business with a physical presence in South Dakota must be licensed before it sells, and the license itself costs nothing. The license guide walks through the application.

If your customers are in South Dakota but you are not, the state's $100,000 remote seller threshold decides whether you register. The remote seller page covers it, including the 30-day clock.

Collecting, filing and staying clean

Once licensed, the work is charging the right rate in the right place and filing on time. The collecting guide covers where a service is taxed, because a haircut and a repair follow different location rules. The filing guide covers due dates and late costs.

Before the first return, the checklist page runs the month in order. The first-year costs page prices the whole obligation, from the $0 license to the 10% late penalty.

One warning worth the hub itself: operating without the license is a Class 1 misdemeanor, published as such on the state's own license page.

The business behind the invoices

Sales tax attaches to the business's receipts, whoever owns it. Many service owners run the trade through an LLC: $150 to file, $55 a year in reports.

The formation services page compares the services that file that paperwork for you, against the file-it-yourself route at the same state fee. It uses each service's own published prices, checked on the date shown.

Which services are taxed, by trade?

• Sales tax on electrical work in South Dakota — How South Dakota taxes an electrician's jobs: contractor's excise tax on realty improvement work, sales tax elsewhere, and what subs owe.
• Sales tax on food truck sales in South Dakota — How South Dakota taxes a food truck: 4.2% state, city tax, and the 1% municipal gross receipts tax, with the prepared food test that decides it.
• Sales tax for South Dakota salons and barbers — How South Dakota taxes salons and barber shops: 4.2% plus city tax on services, the booth-renter split, and use tax on chair supplies.
• Sales tax on landscaping in South Dakota — How South Dakota taxes landscaping: 4.2% plus city tax on lawn and tree services, and the 2% contractor's excise tax on realty improvement jobs.
• Sales tax on cleaning services in South Dakota — How South Dakota taxes cleaning and janitorial services: 4.2% plus city tax where the work is done, exempt customers, and use tax on supplies.
• Sales tax on moving services in South Dakota — How South Dakota taxes a moving company: 4.2% plus city tax on the move and the delivery charge, and taxable storage on the back end.

What rates apply, and where?

• South Dakota sales tax rates explained — Every rate a South Dakota service business can meet: 4.2% state, 1 to 2% municipal, 1% municipal gross receipts, 2% contractor's excise and more.
• South Dakota's remote seller sales tax rule — South Dakota's $100,000 remote seller threshold: who must register from out of state, the thirty-day clock, and what counts toward the gross.

Getting licensed and collecting

• Get a South Dakota sales tax license — How a service business applies for a South Dakota sales tax license online, what it costs, and what the penalty is for operating without one.
• Charge sales tax on a South Dakota service — How to charge South Dakota sales tax on a service: the 4.2% state rate, municipal add-ons, where a service is taxed, and what stays exempt.

Filing and staying clean

• File a South Dakota sales tax return — How to file and pay a South Dakota sales tax return: EPath, the 20th and 25th of the month, what a late return costs, and zero-sales months.
• Your first South Dakota sales tax return — A checklist for a service business's first South Dakota sales tax return: license, receipts by city, certificates, due dates and the EPath filing.
• First-year sales tax costs in South Dakota — What sales tax compliance costs a South Dakota service business in year one: the $0 license, the state filings on top, and what going late costs.

Setting up the business

• LLC formation for South Dakota service trades — Formation services for a South Dakota service business LLC: each one's own published prices, what renews, and the $150 file-it-yourself route.

Questions