How to Get a Resale Certificate in South Dakota

What a Resale Certificate Is (and Why It Matters)

A resale certificate is a document a business provides to a supplier to purchase goods intended for resale without paying sales tax at the time of purchase. The business then charges sales tax when it sells those taxable items to the end customer (unless an exemption applies).

Resale certificates are commonly used by retailers, wholesalers, online sellers, and certain manufacturers that buy inventory or component parts for resale.

Snapshot Table: Out-of-State Overview (Quick Reference)

How to Get a Resale Certificate in South Dakota

Step 1: Confirm You Need South Dakota Sales Tax Registration

In most cases, to properly claim a South Dakota resale exemption, your business should hold a South Dakota sales tax license (especially if you have South Dakota nexus or are otherwise required to register). Vendors commonly expect a valid South Dakota sales tax license number or approved exemption documentation.

Step 2: Register for a South Dakota Sales Tax License

• Determine whether your activity creates South Dakota sales tax obligations (in-state presence, inventory, employees, or other business connections).
• Apply for a South Dakota sales tax license and retain your account details for resale purchasing.

Step 3: Complete the Resale Certificate for Your Vendor

When purchasing inventory for resale, provide your supplier with a completed resale certificate containing:

• Legal business name and DBA (if applicable)
• Business address and contact information
• Type of business and description of products sold
• State sales tax license number (as applicable)
• Signature, title, and date

Give the certificate to the vendor before or at the time of purchase and keep a copy for your records.

Step 4: Use the Certificate Only for Qualifying Purchases

Resale certificates are intended for purchases of items that will be resold in the normal course of business. Purchases of supplies, equipment, or items used or consumed by your business generally do not qualify.

Step 5: Maintain Documentation for Audit Readiness

Keep resale certificates and supporting records (purchase orders, invoices, product catalogs, and resale listings) organized by vendor and date. Strong documentation helps support why tax was not paid at purchase.

Businesses Buying for Resale: Practical Guidance

Many businesses also streamline compliance by keeping core licensing and operational requirements organized alongside sales tax accounts. See business licenses and compliance basics for related requirements that can affect setup and ongoing filings.

Common Mistakes to Avoid

• Using a resale certificate for business-use items: office supplies, tools, furniture, and equipment are commonly taxable.
• Providing the wrong state’s certificate: vendors often require a specific state format or state registration number.
• Not updating vendor files: changes to business name, address, or entity type should be refreshed with suppliers.
• Poor recordkeeping: missing certificates and invoices can lead to tax assessments during audits.
• Assuming “online sales” are automatically exempt: resale rules depend on the nature of the purchase and your registrations.

Operational Tip: Pair Resale Setup with Payment Readiness

When you’re purchasing inventory for resale, you’re usually also preparing to accept customer payments and remit sales tax. If you’re setting up checkout for in-store or online sales, review how to accept credit cards for your business to align payment processing with tax collection workflows.

Official South Dakota resource: South Dakota registration and tax guidance.

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