Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

Can I collect sales tax from customers in different states without violating tax laws in South Dakota? What are the requirements?

To collect sales tax from customers in different states without violating tax laws in South Dakota, you must register to pay or to collect and remit applicable South Dakota sales or use tax in accordance with the terms of the Streamlined Sales and Use Tax Agreement [1.1]. The Streamlined Sales and Use Tax Agreement requires each state to establish uniform standards for the sourcing of transactions to taxing jurisdictions, the administration of exempt sales, the allowances a seller may take for bad debts, sales and use tax returns and remittances, and requires states to develop and adopt uniform definitions of sales and use tax terms. The agreement also requires a central, electronic registration system that allows a seller to register to collect and remit sales and use taxes for all signatory states. The agreement provides that registration with the central registration system and the collection of sales and use taxes in the signatory states will not be used as a factor in determining whether the seller has nexus with a state for any tax [1.2].

If a seller is registered to pay or to collect and remit applicable South Dakota sales or use tax in accordance with the terms of the Streamlined Sales and Use Tax Agreement, they are not liable for any uncollected or unpaid sales or use tax, penalty or interest, unless the seller was registered in this state during the twelve-month period preceding the date the state is found in compliance with the Streamlined Sales and Use Tax Agreement [1.1]. However, if a seller is not obligated to collect and remit the tax imposed under chapters 10-45, 10-46, or 10-52, the amnesty period provided by this section ends twelve months after the date the Streamlined Sales Tax Governing Board has determined that adequate certified service providers and certified automated systems are available [1.1].

Therefore, to avoid violating tax laws in South Dakota, a seller should register to pay or to collect and remit applicable South Dakota sales or use tax in accordance with the terms of the Streamlined Sales and Use Tax Agreement.

Source(s):
Jurisdiction

South Dakota