Charge sales tax on a South Dakota service

The rate you charge, state plus city

Charge 4.2% state sales tax plus the municipal tax of the city where the customer receives your service. Municipal rates run 1 to 2% where they apply.

The two taxes stack. A $100 service in a 2% city carries $4.20 state plus $2.00 municipal, and the customer sees $6.20 on the invoice. Some trades stack a third tax: eating establishments in many cities also owe a 1% municipal gross receipts tax.

If you work across city lines, the rate moves with the job. The rates page lays out every rate the state publishes and what each attaches to.

4.2% + 1 to 2%The South Dakota state sales and use tax rate is 4.2%, and municipal sales and use tax rates run 1 to 2%. — South Dakota Department of Revenue, retrieved 2026-09-29

Where a service is taxed

The tax follows the customer, not your shop. Sales tax applies where the customer receives the product or service.

The Department splits services into groups for this. Personal care services, meaning any service performed on the physical human body like haircuts or massages, are taxed where the service is performed. Services performed on products, like repair work, are taxed where the finished product is delivered back to the customer.

A mobile trade feels this rule directly. A mover delivering a customer's goods into a different city charges that city's rate on the work. A cleaner working at a customer's building charges the tax of that city, wherever the business is based.

South Dakota taxes personal care services at the location the service is performed, and services performed on products where the product is delivered to the customer. — South Dakota Department of Revenue, retrieved 2026-09-29

Adding tax to the price, or stating it separately

South Dakota law lets you add the tax to the price of the service. Whether or not you collect it, you owe it. That is the sentence to build your invoicing on.

If you fold tax into one posted price, you must tell the customer the tax is included. Bars may back the tax out of a drink price arithmetically; every other business must state that tax is in the price to count it that way.

For most service businesses the clean habit is a separate tax line on every invoice. It keeps your gross receipts, your taxable receipts and your municipal breakdowns reconcilable when the return comes due.

South Dakota law allows the seller to add the tax to the price, but the seller is liable for the sales tax due whether or not it is collected. — South Dakota Department of Revenue, retrieved 2026-09-29

Bars may back tax out of a posted price, but all other businesses must clearly state to the customer that tax is included to include tax in a posted price. — South Dakota Department of Revenue, retrieved 2026-09-29

When a customer hands you a certificate

You may skip the tax only on a properly completed exemption certificate from the buyer. The three grounds are resale, an exempt use, or an exempt entity such as South Dakota state or local government.

Keep each certificate in your records for three years. A blanket certificate covers recurring purchases, at least one within twelve consecutive months, and stays in force until the buyer cancels it. Without the certificate, you collect the tax.

Cleaning businesses meet exempt customers often, because South Dakota public schools and governments are exempt entities. The cleaning page covers what that looks like when the school district is your biggest account.

3 yearsA South Dakota seller may exempt a sale only on a properly completed exemption certificate, which must be kept in the seller's records for three years. — South Dakota Department of Revenue, retrieved 2026-09-29

South Dakota governments and public schools are examples of exempt entities whose purchases are not subject to sales tax. — South Dakota Department of Revenue, retrieved 2026-09-29

Supplies you use versus supplies you sell

You are the consumer of the products you use to deliver your service. If your supplier does not charge you tax on those supplies, you owe use tax on their purchase price when you use them.

Use tax runs at the same rate as sales tax, on the purchase price including freight and handling, and it is due in the filing period you receive the goods. It is reported on the same return as your sales tax.

The line to hold is between used and resold. Products you hand to the customer as part of the sale, bought on a resale certificate, are not use-taxed. Products that stay in your van or your caddy are. The filing guide shows where each number lands on the return.

South Dakota use tax runs at the same rate as sales tax, due in the period the product or service is received, when the applicable sales tax was not collected. — South Dakota Department of Revenue, retrieved 2026-09-29

A service provider is the consumer of products and supplies used in performing the service and owes use tax on supplies taken from inventory that were purchased without tax. — South Dakota Department of Revenue, retrieved 2026-09-29

Questions