Sales Tax Rules
South Dakota imposes a state sales tax rate of 4.2%, with a maximum combined rate (state plus local) of 6.2% when local taxes are added. Economic nexus is triggered at $100,000 in sales — meaning out-of-state businesses that exceed this threshold must collect and remit South Dakota sales tax. SaaS and digital software products are taxable in South Dakota. Groceries are subject to sales tax in South Dakota.
SaaS Tax Details
SaaS is taxable as it is considered a digital product or service.
Grocery Details
Groceries are taxable at the full state rate.
What is the sales tax rate in South Dakota?
South Dakota's state sales tax rate is 4.2%. When local taxes are added, the maximum combined rate can reach 6.2%. The actual rate you pay depends on the county and city where the purchase is made.
What is the economic nexus threshold in South Dakota?
South Dakota requires out-of-state businesses to collect sales tax once they exceed $100,000 in sales in a calendar year. Once nexus is established, the business must register, collect, and remit South Dakota sales tax.
Is SaaS taxable in South Dakota?
Yes. South Dakota considers SaaS (Software as a Service) taxable. Businesses selling SaaS products to South Dakota customers must collect sales tax. SaaS is taxable as it is considered a digital product or service.
Are groceries taxed in South Dakota?
Groceries are subject to sales tax in South Dakota. Groceries are taxable at the full state rate.
Are digital goods taxable in South Dakota?
Yes. South Dakota taxes digital goods including downloaded software, music, movies, and e-books. Businesses selling digital products to South Dakota customers should collect sales tax.
Are clothing items exempt from sales tax in South Dakota?
Clothing is subject to sales tax in South Dakota at the standard state rate.
How often do I need to file sales tax in South Dakota?
South Dakota requires sales tax filing on a Monthly, Quarterly, or Semi-Annual. Online filing is available through the official Department of Revenue portal.
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Official Source
South Dakota Department of Revenue
Last verified: 2026-03-26 · Always confirm current rates with your tax advisor before filing.