South Dakota – Amended Collection Allowance Credit Provisions

SALT Report 2282 – South Dakota recently enacted legislation that amends and expands the state’s sales and use tax collection allowance credits. The amended language is as follows:

  • Any person who holds a license and is required to file a return and remit tax is allowed, as compensation for the expense of timely collecting and paying the tax, a credit equal to 1 ½% percent of the gross amount of the tax due. However, the credit may not exceed $70 for each return period.
  • Any person required to file a return and to remit tax more than once during a 30-day period may not receive a collection allowance credit that exceeds $70 for all returns filed and all taxes remitted within that 30-day period.
  • The credit allowance is only offered to persons who file their returns and remit the taxes due electronically. However, no collection allowance credit may be granted to anyone who has outstanding tax returns due or who has outstanding tax payments due.
  • Any person who has selected a certified service provider (CSP) as its agent will not be entitled to the collection allowance credit if the CSP receives payment for performing the retailer’s sales and use tax functions in South Dakota.
  • Finally, if the Department of Revenue collects any taxes on behalf of another entity, the Department may charge the entity an administrative fee for collecting the tax.

The provisions in Senate Bill 51 apply to all sales and use tax returns filed, and taxes remitted, after January 1, 2014.

For Further Information

South Dakota State Legislature – SB 51, Laws 2013