How to Obtain a Resale License in South Dakota

You must obtain a resale license from the state if you want to start a business in South Dakota that involves the resale of physical products. You can buy items without paying sales tax if you have a resale license, which is often referred to as a resale certificate or seller’s permission. You can then charge sales tax to your consumers when you sell the goods. Here’s how to obtain a South Dakota resale license.

Registering your business with the South Dakota Department of Revenue is the first step. On the Department’s website, you can register online, or you can fill out a paper registration form and mail it in. Basic information about your company, including the name, address, and federal tax ID number, must be provided.

After registering your firm, you can submit an application for a resale license. You can submit a paper application by sending it in or submit an online application through the Department’s website. You will have to give information about your company as well as specifics on the products you plan to resale.

Resale licenses in South Dakota do not expire, so once you have one, you won’t need to renew it. This is vital to keep in mind. The Department of Revenue must be informed of any changes to your business information, such as a change in location or the addition of new product categories to your inventory.

If you acquire goods from out-of-state merchants that do not charge South Dakota sales tax, you may be obliged to pay use tax to the state in addition to collecting sales tax on the items you sell. Use tax is similar to sales tax in many ways, but it is paid by the buyer as opposed to the vendor. You can get advice from the Department of Revenue if you are unsure whether you are required to pay use tax.

Because it has no personal income tax, no corporate income tax, and very low sales tax rates, South Dakota is frequently referred to as a tax haven. It’s crucial to keep in mind that firms in South Dakota are still required to collect and return sales tax on taxable items, so getting a resale license and adhering to state tax regulations are essential.

In South Dakota, a number of services, including health and dental care, educational services, and some personal services like haircuts and massages, are free from sales tax. However, it’s crucial to confirm with the Department of Revenue if the services provided by your company are taxable or exempt.

In conclusion, obtaining a resale license in South Dakota entails registering your company with the Department of Revenue and applying for a license, which is a reasonably simple procedure. Once you obtain your license, you are able to buy items without paying sales tax and charge clients sales tax when you sell the items. Maintaining compliance with state tax laws is crucial, including paying use tax and keeping abreast of changes to tax legislation.