For the latest news and updates on South Dakota state and local tax

December 9, 2022

South Dakota Proposes Eliminating Sales Tax on Groceries

Authored by: Breea Boylan, MSA and Courtney Easterday, MSA

On December 2, 2022, South Dakota Governor Kristi Noem released her proposed budget for the upcoming fiscal year. The Budget includes a proposal to eliminate state sales tax on groceries.

October 21, 2022

South Dakota Updates for Sales and Use Tax on Political Campaign Purchases

In October 2022, the South Dakota Department of Revenue updated its guidance related to political campaigns. Monetary donations and campaign contributions are not subject to sales tax unless the donation is in exchange for products or services. Internet services purchased by a political campaign, including but not limited to internet activation, access, disconnection, reconnection, upgrades or email, social media posts, and advertising are exempt from sales tax. Political campaigns are required to pay sales tax on internet-related services which include webinars, conferencing, live chats, technical support, streaming video or audio, and campaign manager services. Sales tax is due on items donated to a campaign.

March 4, 2022

South Dakota May Legalize Recreational Cannabis

On February 23rd, 2022, South Dakota took a step forward in potentially legalizing recreational cannabis after the state senate approved legalizing and taxing the cannabis by the slimmest of margins. The final vote was 18-17 in favor of passing the bipartisan legalization legislation (S.B. 3). Senators also approved an excise tax of 15% on sales of recreational cannabis in a separate bill (S.B. 25). Both bills now move to the South Dakota House of Representatives for consideration.

March 4, 2022

South Dakota Senate Thwarts Effort to Cut State Sales Tax to 4%

On February 23rd, 2022, the South Dakota House of Representatives passed H.B. 1327 which would reduce the state’s sales tax from 4.5% to 4%. On February 25th, the South Dakota Senate defeated the bill, and as such there will not be any reduction to the South Dakota sales tax rate. This Senate vote came after the governor advocated for budgetary restraints due to ongoing economic challenges. Furthermore, South Dakota does not impose a Corporate or Individual income tax, so the sales tax is one of the state’s only sources of revenue. The rejection by South Dakota comes after several states, including New York and Connecticut, decided to move forward with plans to reduce sales taxes.

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The State and Local Tax (SALT) laws vary from state to state and are constantly changing. Reach out to Withum’s SALT Team for guidance on how to navigate your state’s local tax laws.