South Dakota sales tax changes for 2026 and 2027

HB 1137 cut the state rate from 4.5% to 4.2% on July 1, 2023, with a sunset clause that repeals the cut effective June 30, 2027. The department’s May 2026 legislative update confirms the reduction is sunsetting in 2027 and the rate returns to 4.5%, with SB 245 sending the extra revenue to homeowner property tax relief.

For retail clients, that means updating point-of-sale rates, invoicing templates and any fixed-price contracts that run past mid-2027.

• SB 96 lets counties impose a gross receipts tax of up to 0.5% on taxable goods and services, for property tax relief. It took effect July 1, 2026, and the earliest a county can start collecting is January 1, 2027.
• The July 2026 Sales and Use Tax Guide says sales of video lottery machines are subject to state, county and city tax beginning July 1, 2026.
• SB 221 sets up licensing for retailers of nicotine and vapor products from July 1, 2026.
• After the US Treasury stopped minting pennies, the department said tax is still computed to the nearest cent, even when a cash total is rounded to the nearest nickel.

Remote sellers and marketplace providers must license once gross sales into South Dakota exceed $100,000 in the previous or current calendar year. Electronic returns are due on the 20th and electronic payments on the 25th.