South Dakota Sales
Tax Rate

South Dakota's state sales and use tax rate is 4.2% in 2026. Municipalities can add a general local sales and use tax of up to 2%, so the combined rate depends on whether the customer receives the taxable product or service inside a taxing municipality.

South Dakota has a broad sales tax base. Retail sales of tangible personal property, electronically delivered products and many services can be taxable. Some municipalities can also impose an additional 1% Municipal Gross Receipts Tax on specified industries such as lodging, prepared food, alcohol and admissions.

Source: South Dakota Sales & Use Tax

Source: South Dakota Municipal Tax

What Is the South Dakota Sales Tax Rate in 2026?

The South Dakota state sales and use tax rate is 4.2% in 2026 before applicable municipal taxes.

The correct combined rate should be based on the municipality where the customer receives the taxable product or service.

Source: South Dakota Municipal Tax Laws & Regulations

How to Calculate South Dakota Sales Tax

To calculate South Dakota sales tax, multiply taxable gross receipts by the combined state and applicable municipal rate.

Taxable Gross Receipts × Combined Sales Tax Rate = Sales Tax

A $100 taxable sale subject only to the 4.2% state rate produces $4.20 of state sales tax. If a 2% municipal sales tax also applies, the combined rate would be 6.2% before any applicable Municipal Gross Receipts Tax.

South Dakota Municipal Sales Tax

South Dakota municipalities can impose a general municipal sales and use tax of up to 2% on taxable sales delivered within the city.

The Department of Revenue administers municipal sales and use taxes together with state sales and use tax. Municipal rates commonly fall between 1% and 2% and can change on January 1 or July 1.

Businesses should use current municipal rate data rather than assuming that all South Dakota cities use the same local rate.

Source: South Dakota Municipal Tax

What Is the South Dakota Municipal Gross Receipts Tax?

A South Dakota municipality can impose an additional 1% Municipal Gross Receipts Tax, often called MGRT, on specific categories of business activity.

• Lodging accommodations for fewer than 28 consecutive days
• Alcoholic beverage sales
• Eating establishments and prepared food for immediate consumption
• Admissions to places of amusement, athletic events and cultural events

MGRT is separate from the municipality's general sales tax. When both apply, a qualifying transaction can be subject to state sales tax, municipal sales tax and the additional municipal gross receipts tax.

Source: South Dakota Municipal Tax Laws & Regulations

What Is Taxable in South Dakota?

South Dakota generally taxes retail sales of products and services unless a specific exemption applies.

• Tangible personal property
• Leases and rentals of taxable property
• Electronically delivered products
• Many services performed for customers
• Prepared food and restaurant sales
• Short-term lodging and other taxable transactions

South Dakota's service tax base is broader than in many states. Businesses that primarily sell services should confirm whether a statutory exemption applies instead of assuming the service is nontaxable.

Source: South Dakota Sales & Use Tax

South Dakota Sales Tax Exemptions

South Dakota exempts specific transactions and exempt purchasers, but businesses should document the basis for every exempt sale.

Common exemption situations can include qualifying sales for resale, sales to exempt entities and transactions specifically excluded by South Dakota law. A seller that accepts an exemption certificate should retain the required documentation.

Because municipal taxes generally follow the state tax base, an exemption from state sales tax often affects municipal sales tax as well, though industry-specific MGRT rules should still be reviewed.

South Dakota Sales Tax vs. Use Tax

South Dakota use tax applies when a taxable product or service is used or consumed in the state and the correct sales tax was not paid.

The state use tax rate is also 4.2%. Municipal use tax can apply when the taxable product or service is used inside a municipality that imposes a local tax.

Source: South Dakota Sales & Use Tax

South Dakota Remote Seller Economic Nexus

A remote seller without physical presence can be required to collect South Dakota sales tax when gross sales into the state exceed $100,000 in the previous or current calendar year.

The threshold applies to gross sales into South Dakota and can include tangible personal property, electronically delivered products and services. A remote seller that exceeds the threshold must obtain a South Dakota sales tax license and remit applicable state and municipal tax.

Marketplace providers also have collection responsibilities under South Dakota law, so sellers should distinguish direct sales from sales facilitated through a marketplace.

Source: South Dakota Sales & Use Tax

South Dakota Sales Tax License and Filing

Businesses that make taxable sales in South Dakota generally need a South Dakota sales tax license and must file returns on the frequency assigned by the Department of Revenue.

Electronic returns are generally due by the 20th day of the month following the reporting period. Electronic payments are generally due by the 25th. Paper returns and payments are generally due by the 20th.

A return is still required when no tax is due if the business remains registered for that reporting period.

Source: South Dakota Business Tax Filing Dates

Source: South Dakota Sales & Use Tax Laws & Regulations