South Dakota: The Mount Rushmore State

South Dakota is located in the Northwest of the United States. The “Mountain Rushmore State” is almost 200,000 km² in size. The state is bordered by North Dakota to the north, Minnesota and Iowa to the east, Nebraska to the south, and Wyoming and Montana to the west. South Dakota is home to a good 800,000 residents. According to ehuacom, the capital, Pierre, is not one of the largest cities in the state.

South Dakota Location Map

BUSINESS FRIENDLY ENVIRONMENT

South Dakota offers entrepreneurs and small business owners various location advantages. The cost advantage was confirmed by CNBC 2019, South Dakota was the second cheapest location for companies nationally. The state also achieved the same ranking in the “Business Friendliness” category. According to Forbes, “Mountain Rushmore State” is the “Best State for Business Costs” (2019).

In addition to a limited number of regulations, South Dakota scores with few taxes. Corporate or income taxes, for example, do not apply at all. Entrepreneurs are given a lot of freedom here. You can focus entirely on investing in your business and growing it.

In South Dakota, newcomers meet a well-connected business community. Cross-company collaboration is important here, and the barriers to other leaders and decision-makers are broken down through mentorship and a healthy dose of hospitality. The business-friendly environment and the reliable economy leave room for innovations. It was not for nothing that Sioux Falls led the “Best Small Places for Business & Careers” ranking (Forbes, 2019).

DEVELOPMENT OF KEY INDUSTRIES

Companies in the local key industries can show steady growth. In fact, the “Mountain Rushmore State” is home to one of the largest financial sectors in the country. South Dakota-based companies are national leaders in food science and manufacturing.

South Dakota understands the importance of agricultural science and innovation. Thanks in part to the support of its unique research facilities and a rich history in agricultural production, the state is a leader in value-added agriculture. Ample space to thrive, a growing livestock population, and a dedicated Midwestern workforce have made South Dakota a top location for food processors to thrive.

The life sciences industry in South Dakota offers a wealth of support to private and public companies through a large network of partners and programs that support research, advocacy and education in biotechnology. The life sciences infrastructure includes cGMP-compliant facilities, state-of-the-art research parks and world-class healthcare systems, as well as numerous degree programs offered by government life sciences institutions.

South Dakota scientists have filed hundreds of patents on everything from agrobiological technologies to renewable energy systems and surgical devices. With easy access to resources, leadership, collaboration, and a business-centric environment, life sciences companies in South Dakota are better positioned to push boundaries and make breakthroughs.

MANPOWER – READY AT ALL TIMES

Buzzwords such as passion, dedication and skill are often used to describe the South Dakota workforce. They are considered South Dakota’s most valuable asset and have helped many businesses grow. Thanks to high-quality and diverse education, there are highly qualified talents in all sectors and job types.

The well-trained workforce contributes to the progress of South Dakota. The state has one of the highest net immigration rates in the country. This helps ensure companies have enough talent to develop.

INCOME TAX IN SOUTH DAKOTA

South Dakota does not levy an income tax. However, there are federal income taxes to be paid.

SOUTH DAKOTA IN SOUTH DAKOTA

South Dakota does not collect a corporate income tax. However, corporation tax has to be paid in the federal government.

SOUTH DAKOTA SALES TAX

There is no sales tax or Value Added Tax (VAT) in the USA based on the European model. Instead, in the United States, states, counties, and municipalities levy a local sales tax on the sale of products (but not services).

Sales Tax Rate in South Dakota

The sales tax in South Dakota is 4.5% at the state level. Municipalities or districts charge an average of 1.90% sales tax. Combined, an average of 6.40% is due.

South Dakota Nexus Laws & Sales Tax

Learn more about the Economic Nexus Laws in the context of Sales Tax here.

Effective Date

November 1, 2018

Transactions included:

Gross proceeds from the sale of tangible personal property, electronically delivered products, or services to the US state

Treatment of tax-exempt transactions:

Exempt Sales and Exempt Services are included in the threshold

Reason:

sales or transactions

Sales/Transactions Threshold:

$100,000 or 200 transactions

Evaluation period:

The threshold applies to the previous or current calendar year

Extra information:

  • Registration Requirements: South Dakota requires remote businesses to register and collect and remit South Dakota sales tax upon crossing the Economic Nexus Threshold. See the Remote Seller Bulletin formore information.
  • Remote Seller Information

South Dakota Marketplace Sellers & Sales Tax

Learn more about Marketplace seller registration requirements

Effective date by the marketplace broker:

March 1, 2019

Economic Nexus Threshold:

For remote sellers, more than $100,000 in gross sales or at least 200 transactions in South Dakota in the current or previous calendar year (special rules apply for marketplace providers). Remote sellers should include sales through a marketplace in the calculation of the threshold. Marketplace intermediaries include all taxable sales made through the marketplace when calculating the threshold.

Registration requirements:

  • Remote Multichannel Sellers: You must register with the South Dakota Department of Revenue (DOR) and collect South Dakota sales tax on sales not taxed by a Marketplace Agent once you have crossed the Economic Nexus Threshold.
    • Sales made through a collectible marketplace should be considered sales for resale.
  • Remote Marketplace Vendors: You must register once you cross the Economic Nexus Threshold. You have the option to submit an affidavit stating that you only sell through one or more marketplace providers, which would allow you to hold an active VAT license but not have to file declarations. Contact the South Dakota DOR for more information.
  • In-State Multichannel Sellers: You must register with the South Dakota DOR and collect taxes on sales that are not taxed by a marketplace facilitator.
    • Sales made through a collectible marketplace should be considered sales for resale.
  • State Marketplace Sellers: You must register. Contact the South Dakota DOR for more information.