South Dakota economic nexus threshold

South Dakota's economic nexus threshold is $100,000 in sales.

Included transactions:

• All gross sales, both taxable and exempt
• Electronically transferred products and services delivered into South Dakota
• Sales made through a registered marketplace facilitator still count toward the remote seller's own threshold

Excluded transactions:

• South Dakota does not publish an explicit exclusion list. Because the threshold includes exempt transactions, sellers whose products are primarily exempt should still monitor gross revenue carefully.

Affiliate Nexus

South Dakota's affiliate nexus provisions are codified in SDCL Chapter 10-45, which defines when an out-of-state retailer is considered engaged in business in the state. A remote seller meets that standard if it holds a substantial ownership interest of more than 10% equity in an in-state entity and satisfies at least one of three additional conditions:

• It sells the same or substantially similar product line under the same business name as that in-state retailer;
• It has a related in-state entity with a distribution or warehouse facility that delivers goods to South Dakota consumers;
• It contracts with an in-state entity to provide installation, maintenance, or repair services for South Dakota customers.

South Dakota also applies a rebuttable controlled-group presumption: if any member of a seller's controlled group already has nexus in South Dakota, all other members of that controlled group are presumed to have nexus as well. This presumption can be rebutted with sufficient contrary evidence. South Dakota has no standalone click-through nexus statute.

Physical Nexus

Any physical presence in South Dakota creates nexus immediately, regardless of sales volume. Under SDCL Chapter 10-45, nexus-creating activities include:

• Maintaining a retail store, office, warehouse, or any other place of business in the state;
• Holding leased or owned real property;
• Employing a salesperson, agent, or independent contractor who solicits orders in South Dakota;
• Making deliveries into the state using company-owned vehicles rather than a common carrier or U.S. mail;
• Storing inventory in a South Dakota third-party warehouse, including fulfillment through Amazon FBA with no safe harbor.

Exhibiting or soliciting at a trade show in South Dakota also creates physical nexus. Attending a trade show solely as a non-selling spectator does not. A South Dakota-based employee who is not involved in making sales does not independently trigger physical nexus.

Trailing Nexus

South Dakota has no formally published trailing nexus policy. When a seller closes South Dakota operations or falls below the $100,000 annual threshold, the state has not codified a defined period during which nexus continues after the triggering condition ends.

Economic Nexus Threshold: $100,000 in gross sales only

Effective Date: January 1, 2016 (original law); July 1, 2023 (dollar-only threshold)

Evaluation Period: Current or previous calendar year (fixed annual window, not rolling). Collection begins on the very next transaction after crossing the threshold.

Previous Threshold Rules: $100,000 in gross sales OR 200 transactions from January 1, 2016 through June 30, 2023. The 200-transaction prong was repealed effective July 1, 2023.

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