--- title: "South Dakota marketplace facilitator law and 1099-K rules" description: "South Dakota marketplace providers collect 4.2% sales tax since March 1, 2019; a monthly marketplace fee can itself be taxable, a sales commission is not." canonical: https://resellerindex.com/tax/states/south-dakota/ last_updated: 2026-10-23 publisher: "The Reseller Index" --- [Taxes](https://resellerindex.com/tax/) / [State tax rules](https://resellerindex.com/tax/states/) / South Dakota # Selling on eBay, Poshmark or Etsy from South Dakota: sales tax and 1099-K rules On a marketplace sale into South Dakota, the marketplace provider licenses and remits sales tax if it is a remote seller over $100,000 of South Dakota gross sales or facilitates sales for any seller, or group of sellers combined, that meets that test, and a South Dakota business selling through a licensed marketplace is not responsible for remitting on those sales. The South Dakota Department of Revenue pages we checked say nothing about a separate South Dakota 1099-K rule. General information, not tax advice. Check with a tax professional about your own situation. Checked against the official pages listed below on Oct 19, 2026. ## South Dakota in short - **General sales tax:** Yes, 4.2% state rate - **Marketplace facilitator law:** Yes: SDCL 10-65-5 (SL 2018 (SS), ch 3), since Mar 1, 2019 - **When a marketplace must collect:** the provider is a remote seller (more than $100,000 in gross sales into South Dakota in the previous or current calendar year), or facilitates sales for at least one marketplace seller that meets that test, or for two or more sellers whose combined sales meet it - **Form 1099-K:** No state rule stated on the pages checked ## Who collects the tax on a marketplace sale A marketplace provider that meets any of the three tests licenses with the Department and remits sales tax on all sales it facilitates into South Dakota. It registers by the first day of the month that starts at least 30 days after the threshold is met. ### If you sell only through marketplaces The Department says marketplace sellers that meet South Dakota's remote seller law may also be required to get licensed. For a South Dakota business, sales through a licensed marketplace that is remitting are not the business's to remit; if a marketplace is not licensed, the business remits on all its South Dakota sales. Registration, resale certificates and what changes when you also sell direct have their own page: [South Dakota: seller's permit and resale certificate rules](https://resellerindex.com/tax/sellers-permit/south-dakota/). The law: [SDCL 10-65-5 (SL 2018 (SS), ch 3)](https://sdlegislature.gov/api/Statutes/10-65-5.html), effective Mar 1, 2019. > "As of March 1, 2019, marketplace providers have been required to license their business and remit applicable sales tax on all sales it facilitates into South Dakota if:" South Dakota Department of Revenue, [Marketplace (tax fact bulletin, July 2025)](https://dor.sd.gov/media/e0ajtwlg/marketplace-provider-bulletin.pdf), Marketplace bulletin (July 2025), Marketplace Providers > "Marketplace sellers that meet South Dakota’s remote seller law may also be required to get licensed." South Dakota Department of Revenue, [Marketplace (tax fact bulletin, July 2025)](https://dor.sd.gov/media/e0ajtwlg/marketplace-provider-bulletin.pdf), Marketplace bulletin, Marketplace Provider FAQs: Who is required to obtain a sales tax license? > "Facilitates the sales of two or more marketplace sellers that, when the sales are combined, are subject to" South Dakota Legislature, [SDCL 10-65-5, Certain marketplace providers required to collect and remit sales tax--Criteria](https://sdlegislature.gov/api/Statutes/10-65-5.html), SDCL 10-65-5(3) Sources: [Marketplace (tax fact bulletin, July 2025)](https://dor.sd.gov/media/e0ajtwlg/marketplace-provider-bulletin.pdf); [SDCL 10-65-5, Certain marketplace providers required to collect and remit sales tax--Criteria](https://sdlegislature.gov/api/Statutes/10-65-5.html); [Remote Seller Bulletin (August 2025)](https://dor.sd.gov/media/yh0n3oc2/remote-seller-bulletin.pdf). ## South Dakota's sales tax The state sales and use tax rate is 4.2%, and municipal taxes are reported on the same return. South Dakota's sales tax applies to most services as well as goods. > "The 10% fee retained is exempt from sales tax because the fee is contingent on the sale of a product through the platform." South Dakota Department of Revenue, [Marketplace (tax fact bulletin, July 2025)](https://dor.sd.gov/media/e0ajtwlg/marketplace-provider-bulletin.pdf), Marketplace bulletin, Taxability of Services Provided by Marketplace Providers, example 1 > "The state sales and use tax rate is 4.2%." South Dakota Department of Revenue, [Sales & Use Tax](https://dor.sd.gov/businesses/taxes/sales-use-tax/), page Sources: [Sales & Use Tax](https://dor.sd.gov/businesses/taxes/sales-use-tax/); [Marketplace (tax fact bulletin, July 2025)](https://dor.sd.gov/media/e0ajtwlg/marketplace-provider-bulletin.pdf). ## Form 1099-K: South Dakota and the federal test The Department of Revenue sales tax pages and bulletins read for this page say nothing about a South Dakota Form 1099-K requirement. The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." ([Understanding your Form 1099-K](https://www.irs.gov/businesses/understanding-your-form-1099-k), reviewed Jun 28, 2026). The [Instructions for Form 1099-K](https://www.irs.gov/instructions/i1099k) count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in [Form 1099-K for resellers](https://resellerindex.com/guides/1099-k-for-resellers/). Sources: [Sales & Use Tax](https://dor.sd.gov/businesses/taxes/sales-use-tax/). ## Worked examples ### Tax on a $40 marketplace sale to Sioux Falls At the 4.2% state rate, a $40.00 taxable item carries $1.68 of state tax, plus any municipal tax for the delivery location. The licensed marketplace provider remits it. ### When a newly qualifying provider must register The Department's own example: an out-of-state seller's gross revenue from South Dakota sales passes $100,000 on May 28. It is not required to register and collect until July 1, the first day of the first month that starts at least 30 days later. ### Fees a marketplace charges sellers The Department's examples: a 10% commission kept only when an item sells is exempt; a $50 monthly fee to post up to 20 items, due whether or not anything sells, is taxable; and with a $20 monthly fee plus a 5% commission, the provider owes tax on the $20 fee only. At 4.2%, the tax on a $50 monthly fee is $2.10. ## Edge cases and details - South Dakota taxes most services, including a marketplace provider's charges to sellers, but SDCL 10-45-12.5 exempts a fee or commission received only when a sale is made, so subscription-style fees and per-sale commissions are treated differently. - A marketplace provider gives sellers a notice, posted on its website and sent to each seller, that it reports and remits South Dakota tax and the date it began, in place of a resale certificate. - The Department says meal delivery platforms have a physical presence through their drivers, so they must be licensed and pay tax regardless of sales volume. - The state cannot collect from a marketplace provider for sales made before March 1, 2019 (SDCL 10-65-8), and a hold harmless provision limits penalties when a seller gives a provider inaccurate information (SDCL 10-65-7). - A provider must file every sales tax return even when it has no sales to report, and may use one license or two for its own and marketplace sales. ## What to do 1. If you are a South Dakota business, confirm each marketplace you sell on is licensed and remitting South Dakota tax; the Department says it will verify a provider's license on request. 2. If you are outside South Dakota, total your gross sales into the state for the current and previous calendar year against the $100,000 remote seller test, and check with a tax professional about licensing. 3. Look at how each marketplace bills you: a flat monthly fee may carry South Dakota tax, while a per-sale commission is exempt under the Department's examples. ## Common questions ### Do marketplaces collect South Dakota sales tax? Yes. Since March 1, 2019, a marketplace provider that is a remote seller, or facilitates sales for a seller or sellers meeting the remote seller test, licenses and remits South Dakota sales tax on all sales it facilitates into the state. ### Is a marketplace's monthly store fee taxable in South Dakota? It can be. The Department's examples treat a monthly fee charged whether or not anything sells as taxable, and a fee or commission received only when a sale is made as exempt under SDCL 10-45-12.5. ### Does South Dakota still have a 200-transaction test? The Department's July 2025 marketplace bulletin and August 2025 remote seller bulletin describe only the $100,000 gross sales test. ### Does South Dakota have its own 1099-K threshold? The Department of Revenue pages we checked say nothing about a South Dakota 1099-K rule. ## Related - [Every state on one table: sales tax, marketplace facilitator laws and 1099-K rules](https://resellerindex.com/tax/states/) - [South Dakota: seller's permit and resale certificate rules](https://resellerindex.com/tax/sellers-permit/south-dakota/) - [South Carolina: sales tax and 1099-K rules](https://resellerindex.com/tax/states/south-carolina/) - [Tennessee: sales tax and 1099-K rules](https://resellerindex.com/tax/states/tennessee/) - [Form 1099-K for resellers: the federal test](https://resellerindex.com/guides/1099-k-for-resellers/) - [Do eBay's fees apply to the sales tax a buyer pays?](https://resellerindex.com/guides/ebay-fees-on-sales-tax/) - [Where each selling app keeps its sales report](https://resellerindex.com/guides/sales-reports-for-taxes/) ## General information, not tax advice This page summarizes South Dakota's own published pages and statutes as read on Oct 19, 2026, and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department. ## Sources Official pages this page is built from, with the day each was read. - South Dakota Department of Revenue: [Marketplace (tax fact bulletin, July 2025)](https://dor.sd.gov/media/e0ajtwlg/marketplace-provider-bulletin.pdf); read Oct 19, 2026. March 1, 2019 start, three tests, timing example, fee taxability, notices, FAQs. - South Dakota Department of Revenue: [Remote Seller Bulletin (August 2025)](https://dor.sd.gov/media/yh0n3oc2/remote-seller-bulletin.pdf); read Oct 19, 2026. $100,000 remote seller test and registration timing. - South Dakota Legislature: [SDCL 10-65-5, Certain marketplace providers required to collect and remit sales tax--Criteria](https://sdlegislature.gov/api/Statutes/10-65-5.html); read Oct 19, 2026. Three criteria for provider collection. - South Dakota Department of Revenue: [Sales & Use Tax](https://dor.sd.gov/businesses/taxes/sales-use-tax/); read Oct 19, 2026. 4.2% state rate. - IRS: [Understanding your Form 1099-K](https://www.irs.gov/businesses/understanding-your-form-1099-k), reviewed Jun 28, 2026. The federal 1099-K test. - IRS: [Instructions for Form 1099-K](https://www.irs.gov/instructions/i1099k), reviewed Jun 1, 2026. Both parts of the federal test counted for the calendar year. Subscribe: https://resellerindex.com/subscribe/ --- The Reseller Index Researched and drafted with AI assistance from each platform's and carrier's own published pages. A full-time reseller runs The Reseller Index and will edit every newsletter issue once the newsletter starts. Every number links to its source and carries the date we checked it. Spot an error? [Tell us](https://resellerindex.com/corrections/) and we'll fix it in the public corrections log. 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