Use tax may be due on online purchases in South Dakota

SIOUX FALLS, S.D. (KSFY) - The South Dakota Department of Revenue is issuing a reminder on the biggest online shopping day of the year: state and municipal taxes may be due on some online purchases.

According to Public Affairs Manager Wade LaRoche, South Dakotans owe use tax if they did not pay sales tax when making a purchase. Use tax is also due if the sales tax paid to another state was lower than what would have been paid in South Dakota - in this case the difference in the two amounts is how much use tax is owed.

“Many consumers do not realize that several internet retailers are not collecting sales tax on online sales and that use tax would be due in these instances,” Business Tax Division Director Doug Schinkel said, via a press release. “Cyber Monday is a good time to remind citizens to check their online transactions to see if the tax is owed.”

State officials estimate nearly $50 million in use tax goes unreported in South Dakota each year. That money would normally go towards the state's general fund, which pays for things like schools, universities, public safety, and more.

You can learn more about use tax requirements here.



 
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