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Use tax may be due on online purchases

For Immediate Release: Monday, November 27, 2017
Contact: Wade LaRoche, Public Affairs Manager, 605-773-5869


Pierre, S.D. – With the holiday season in full swing, the South Dakota Department of Revenue reminds citizens that state and municipal use taxes may be due on their online purchases.


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. “Cyber Monday is a good time to remind citizens to check their online transactions to see if the tax is owed.”


According to the South Dakota Bureau of Finance and Management, an estimated nearly $50 million in use tax goes unreported in South Dakota each year. Like sales tax, the revenues generated from the state use tax go to the state’s general fund, which supports South Dakota’s K-12 schools, state universities, technical institutes and more. Municipal use tax revenues go to city governments, which help fund local needs.


The Department of Revenue offers an online option for South Dakotans to file and pay use tax with a credit card or ACH debit transaction. This feature requires no account registration and can be accessed by visiting http://dor.sd.gov then clicking the online use tax payment button under e-services.


For more information on use tax, including specific examples of when the tax is owed, visit http://dor.sd.gov/Taxes/Business_Taxes/UseTax.aspx.