South Dakota Resale Certificate Guide 2026: How to Get Yours

South Dakota is best known as the state that changed online sales tax forever. The 2018 Supreme Court case South Dakota v. Wayfair originated here and established the right of states to require out-of-state sellers to collect sales tax. The state has a 4.5% sales tax rate with no state income tax, making sales tax one of the primary revenue sources. Combined rates can reach about 8% with local additions. If you buy inventory for resale in South Dakota, this guide covers the full certificate process for 2026.

South Dakota Sales Tax Basics

State Rate

The South Dakota state sales tax rate is 4.5%. This rate was increased from 4% in 2023 as part of a tax restructuring. Cities and other local jurisdictions can add up to about 3% in local taxes, bringing combined rates to approximately 8% in some areas. Sioux Falls has a combined rate around 6.5%, and Rapid City sits near 6.5% as well.

No State Income Tax

South Dakota is one of the few states with no state income tax (individual or corporate). This means the state relies more heavily on sales tax revenue. As a result, South Dakota has a broad sales tax base and taxes many items and services that other states exempt.

Use Tax

South Dakota imposes a use tax equal to the sales tax rate on goods purchased from out-of-state vendors when the seller does not collect South Dakota sales tax. Purchases for resale are exempt from use tax if properly documented.

What Is Taxable in South Dakota?

South Dakota has one of the broadest sales tax bases in the country:

• Most physical goods are taxable
• Groceries are taxable at the full state and local rate
• Prescription drugs are exempt
• Clothing is fully taxable
• Most services are taxable, including professional services, repair, and many business-to-business services
• Digital products are generally taxable
• Farm machinery and agricultural inputs are exempt when used in production agriculture

What Form Do You Need?

South Dakota does not have a state-specific form number for its resale certificate. Instead, the state accepts the SST Certificate of Exemption and generic exemption certificates that include all required information.

Accepted Certificate Formats

The South Dakota Department of Revenue accepts:

• The Streamlined Sales Tax (SST) Certificate of Exemption (the preferred format as an SST member)
• A generic exemption certificate that includes all required fields
• Vendor-provided exemption certificate templates that meet South Dakota's requirements

Key Fields Required

Regardless of the format used, your South Dakota resale certificate must include:

• Purchaser's legal business name and address
• South Dakota sales tax license number
• Type of exemption claimed (resale)
• Description of products being purchased for resale
• Purchaser's signature and date

Where to Get the Forms

The SST Certificate of Exemption is available from the SST Governing Board website. The South Dakota Department of Revenue provides guidance and sample forms at dor.sd.gov.

Who Needs a South Dakota Resale Certificate?

Any business purchasing tangible personal property for resale needs a South Dakota resale certificate. This includes:

Retailers buying inventory to sell through physical stores, online shops, farmers markets, tourist shops, or any other sales channel.

Wholesalers and distributors purchasing goods from manufacturers or importers for redistribution.

Online sellers registered in South Dakota who buy inventory for resale through Amazon, eBay, Etsy, Shopify, or any other marketplace.

Manufacturers purchasing raw materials and components that become part of a finished product manufactured for sale.

Restaurants, bars, and food businesses buying food and beverage ingredients for preparation and resale. Since South Dakota taxes groceries and most services, the resale exemption is especially valuable for food service businesses.

Who Does NOT Qualify

• Consumers buying for personal use
• Businesses purchasing supplies, tools, or equipment for their own internal operations
• Contractors buying materials for installation into real property

How to Apply for a South Dakota Resale Certificate

Step 1: Register for a South Dakota Sales Tax License

You need an active South Dakota sales tax license before you can issue a valid resale certificate. The South Dakota Department of Revenue handles registration.

What you need to register:

• Federal EIN or SSN
• Business legal name and trade name (if applicable)
• Business address and mailing address
• Type of business entity
• Description of products or services sold
• Expected start date
• Estimated monthly taxable sales

Registration is free. Apply online through the South Dakota Department of Revenue's online portal.

Processing time: Online applications are typically processed within 3 to 7 business days.

Step 2: Complete an Exemption Certificate

Download the SST Certificate of Exemption or prepare a generic exemption certificate. Include your South Dakota sales tax license number, indicate the resale exemption, and describe the products you will purchase for resale.

Step 3: Provide the Certificate to Your Suppliers

Give the completed certificate to each vendor from whom you want to buy tax-free. The vendor retains the certificate and does not charge sales tax on qualifying resale purchases.

Want help with the process? We handle everything from registration to certificate completion.

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Multi-State Considerations

South Dakota is a member of the Streamlined Sales Tax (SST) agreement. As the state where the Wayfair decision originated, South Dakota has been at the forefront of modern sales tax policy.

SST Membership

As an SST member, South Dakota accepts the SST Certificate of Exemption from buyers in other SST member states. If you already use the SST certificate in another state, the same format works in South Dakota.

The Wayfair Standard

The South Dakota v. Wayfair decision established the framework that most states now follow for economic nexus. South Dakota's economic nexus threshold is $100,000 in sales or 200 transactions with South Dakota customers in the current or prior calendar year. This threshold has become the model for most other states.

Marketplace Facilitator Rules

South Dakota requires marketplace facilitators to collect and remit sales tax on behalf of third-party sellers. If you sell through Amazon, eBay, or similar marketplaces, the marketplace handles your South Dakota tax obligations. Direct sales require your own registration.

For more on multi-state compliance, see our multi-state resale certificate guide.

Common Mistakes with South Dakota Resale Certificates

Mistake 1: Underestimating the Breadth of Taxable Items

South Dakota taxes almost everything, including groceries and most services. Businesses moving from states with narrower tax bases often underestimate what is taxable here. Make sure you understand which of your purchases are taxable and which qualify for an exemption before issuing certificates.

Mistake 2: Using the Certificate for Taxable Services Consumed Internally

South Dakota taxes many services that other states do not. If you purchase a taxable service for your own business use (cleaning, repair, consulting), the resale exemption does not apply. The exemption only covers services that you will resell to your customers.

Mistake 3: Not Documenting the Exemption for Grocery Purchases

Since South Dakota taxes groceries, food businesses need to provide resale certificates to their grocery and food ingredient suppliers. Failing to document the resale exemption on food purchases means paying tax on items that qualify for the exemption.

Mistake 4: Ignoring Municipal Tax Requirements

South Dakota cities impose their own local sales taxes. When you register at the state level, you also register for applicable local taxes. But if you expand to new locations, you need to ensure your local tax registrations are updated.

South Dakota-Specific Rules You Should Know

Broad Tax Base with No Income Tax

Because South Dakota has no state income tax, the sales tax base is intentionally broad. The state taxes groceries, most services, and tangible personal property at the full rate. This means more of your purchases are taxable, but it also means the resale exemption provides broader savings than in states with narrower tax bases.

Tourism Economy

South Dakota's tourism industry (Mount Rushmore, Badlands, Sturgis Rally, Deadwood) generates significant sales tax revenue. Businesses in the tourism sector should be aware that lodging, food, entertainment, and retail sales are all taxable. Resale certificates are relevant for businesses that purchase goods for retail sale to tourists.

Agricultural Exemptions

Agriculture is a cornerstone of South Dakota's economy. The state provides exemptions for farm machinery, seeds, feed, fertilizer, and agricultural chemicals when used in production agriculture. These exemptions are separate from the resale exemption and have their own requirements.

Electronic Filing

The South Dakota Department of Revenue encourages electronic filing for all sales tax returns. The online portal allows you to file, pay, and manage your account. Electronic filing is faster and reduces errors compared to paper filing.

Record Retention

South Dakota requires businesses to retain sales tax records, including resale certificates, for a minimum of three years from the date the tax was due. During an audit, you need to produce certificates for every exempt sale you made and every exempt purchase you claimed.

How Much Can You Save?

With a 4.5% state rate and combined rates up to about 8%, the resale exemption delivers steady savings.

Your actual savings depend on the combined rate in your city. Use our sales tax lookup tool to find the exact rate for your location.

South Dakota Resale Certificate FAQs

Q: Does the South Dakota resale certificate expire? A: South Dakota does not set a specific expiration date on resale certificates. The certificate is valid as long as your sales tax license is active. Vendors may request updated certificates periodically.

Q: Is there a specific state form I need to use? A: South Dakota does not have a unique state-specific form number. The SST Certificate of Exemption is the preferred format. A generic exemption certificate with all required fields is also accepted.

Q: Is there a fee for a South Dakota sales tax license? A: No. South Dakota does not charge a fee for sales tax registration.

Q: Are groceries taxable in South Dakota? A: Yes. South Dakota taxes groceries at the full state and local rate. If you buy food for resale, the resale exemption applies.

Q: What is the connection between South Dakota and the Wayfair decision? A: South Dakota v. Wayfair (2018) was the Supreme Court case that allowed states to require out-of-state sellers to collect sales tax based on economic activity (sales volume), even without a physical presence in the state. South Dakota's economic nexus law became the model for most other states.

Get Started with Your South Dakota Resale Certificate

South Dakota's SST membership and broad tax base make the resale certificate process straightforward but especially valuable. With no income tax and a broad sales tax, your certificate will cover more purchases than in most other states.

• Expert registration guidance
• Help completing the SST certificate or generic exemption form
• Ongoing compliance support

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For more details on South Dakota's requirements, visit our South Dakota state page.

South Dakota's broad tax base means the resale certificate applies to a wider range of purchases than in most states. Get registered, document your exemptions, and keep your records organized.

Related Articles

• What Is a Resale Certificate? - New to resale certificates? Start with the fundamentals.
• Economic Nexus Changes in 2026 - How the Wayfair standard continues to evolve.
• Understanding Sales Tax Nexus - Learn when you are required to register in South Dakota and other states.