What is South Dakota Senate Bill 43?

South Dakota Senate Bill 43 establishes a new timeline for remote sellers and marketplace facilitators to register for and begin collecting sales tax, providing a 30-day grace period after establishing economic nexus.

How does the Wayfair ruling impact sales tax collection for remote sellers in South Dakota?

The Wayfair ruling allowed states to require out-of-state sellers to collect and remit sales tax if they establish economic nexus, which is now enforced by South Dakota’s new compliance rules.

What is the economic nexus threshold in South Dakota?

The economic nexus threshold in South Dakota is USD 100,000 in gross sales in the previous or current calendar year, which includes sales, rentals, or leasing of tangible goods and services.

When do remote sellers need to register for sales tax in South Dakota?

Under the new rules in Senate Bill 43, remote sellers and marketplace facilitators have 30 days from the establishment of economic nexus to register for sales tax and begin collecting and remitting it.

How does the 30-day grace period benefit remote sellers?

The 30-day grace period gives remote sellers and marketplace facilitators time to prepare for compliance, ensuring they can register properly and meet their sales tax obligations without rushing.

Could other states adopt similar sales tax compliance rules as South Dakota?

Yes, other US states may follow South Dakota's example and introduce similar 30-day grace periods for sales tax registration, helping remote sellers comply with the economic nexus rules more easily.

South Dakota's New Sales Tax Compliance Timeline for Remote Sellers and Marketplace Facilitators

The State of South Dakota became the center of sales and use tax due to the well-known 2018 South Dakota v. Wayfair, commonly known as the Wayfair ruling. The ruling's outcome reshaped the rules and regulations for remote or out-of-state sellers across the US and directly impacted the introduction of economic and marketplace nexus.

In February this year, South Dakota’s Senate signed Bill 43, setting a new timeline for remote sellers and marketplace facilitators to register for and start collecting and remitting sales tax.

New Sales Tax Compliance Timeline

Under the rules before signing Bill 43, remote sellers and marketplace facilitators had to register for sales tax with the South Dakota Department of Revenue as soon as they established an economic nexus. With new rules in place, remote sellers and marketplace facilitators have at least 30 days from the nexus's establishment to register for and start collecting sales tax.

The 30-day prolonged sales tax registration period enables businesses to prepare for compliance diligently. Nevertheless, tax professionals who provide services to these businesses must pay close attention to new rules, ensure they do not register their clients prematurely, and collect and remit taxes on time.

The current economic threshold in South Dakota is USD 100,000 in gross sales in the previous or current calendar year. Gross sales or transactions refer to selling, renting, or leasing tangible goods or services, including products delivered electronically, into South Dakota.

Conclusion

Providing a 30-day grace period between establishing economic nexus and registering for sales tax purposes could be a favorable decision to help out-of-state or remote sellers prepare and make the necessary changes to meet their obligations.

Additionally, other US states may follow South Dakota's example, as they did with the introduction of economic nexus, and update their registration rules to provide a less burdensome registration procedure.

Source: 2025 South Dakota Senate Bill 43