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SD Dept. of Revenue Reminds Consumers of Sales Tax on Cyber Monday

After Black Friday comes Cyber Monday, where retailers encourage consumers to take part in holiday shopping online. Online retailers boast sale prices and limited offers, but consumers still need to be aware of what they’re paying for. Doug Schinkel is the director of business tax with the South Dakota Department of Revenue. He says South Dakota does charge sales tax for online purchases. Schinkel says some companies that don’t have a physical presence in the state might not voluntarily charge a sales tax.

“The person who makes a purchase from that company is not charged that sales tax, but it’s still due, so then a use tax is due. The difference between a sales tax and a use tax is simply the sales tax is paid by the company who the item was purchased from, the use is due from the purchaser—if no sales tax is charged, use tax is due. It’s a fairness issue to the brick and mortar businesses here in the state of South Dakota. It’s unfair for them to have to charge that four percent state, plus the city tax, on these purchases, and not have the out-of-state businesses do the same,” Schinkel says.

Schinkel says consumers should check their invoices for online purchases to determine if a sales tax was already paid. If not, Schinkel says residents can fill out a use tax form online, or contact the Department of Revenue. He says not paying a sales or use tax reduces the revenue available for the state to provide services.