Vehicle Taxes In South Dakota
- sdpl8s
- Aug 12, 2023
- 6 min read
If you own a vehicle in South Dakota, it’s important to understand the taxes associated with owning and registering your vehicle. Owning a vehicle in South Dakota comes with the responsibility of paying proper tax on it. Vehicle taxes in South Dakota come in a couple of forms, including sales tax, registration fees and wheel tax. In this article, we’ll take an in-depth look at each of these taxes and explain how they are calculated and applied.
South Dakota Vehicle Tax Overview
Before we delve into the specific types of taxes that apply to South Dakota vehicles, let’s take a quick overview of the situation. When you own a vehicle in South Dakota, you will need to register it with the state, and pay a variety of taxes and fees. Each state has unique tax laws, so it’s important to know what to expect before you register your vehicle in South Dakota.
Types of SOUTH DAKOTA Vehicle Taxes
There are two types of vehicle taxes in South Dakota: sales tax and registration fees.
Sales tax is a tax on the purchase price of a vehicle and is based on the state’s current tax rate of 4%. The tax rate is the same no matter where you live in South Dakota. If you purchase a vehicle outside of South Dakota and bring it into the state, you will need to pay the "Use" (sales) tax rate of South Dakota.
Registration fees are set by the state and are based on the type of vehicle you own. The average fee for a newer car or SUV is between $98 -$108, while the fee for a motorcycle is $24.00. These fees are due annually and must be paid at the time of registration.
Wheel tax is a tax on the number of tires your vehicle is equipped with (not including spare). This tax rate varies by county, but is typically between $2 - $5 per wheel. This tax is solely collected for the purposes of maintaining roads and bridges for the respective county in which you register your vehicle.
How Vehicle Licensing fees are Calculated
The specific fees for each vehicle varies depending on several factors, including the type of vehicle, the empty weight, and its age. (Annual fees decrease once the vehicle is 10 model years old.)
Registration fees are set by the state and do not vary based on the vehicle’s value (depreciation).
If you purchase a used vehicle, the registration fees are based on the type of vehicle, the weight and year. Whereas sales tax rate is based on the purchase price (or the vehicle’s fair market value in the case of a private sale). If you receive a vehicle as a gift, you MAY be exempt from paying sales tax. (*You must have received the vehicle from immediate, blood relative such as your parents or siblings.)
Tax Exemptions and Reductions
Some vehicle taxes may be reduced under certain circumstances. For example, you may be eligible for paying a reduced sales tax. If you live in a lower tax state, you will pay the difference in the taxes between the two states. For example, f you are a resident of a state with a 2% sales tax rates, and South Dakota being 4%, you will pay the 2% difference in taxes. You will need to provide proof of any previously paid sales taxes in your state of residence.
In addition, military personnel who are stationed in South Dakota are NOT exempt from paying taxes on their vehicles. However, they still need to pay sales tax and registration fees if they register their vehicle in South Dakota.
It’s important to note that failure to pay your vehicle taxes and fees can result in additional penalties and fees. Make sure to title and register your vehicle within 45-days of purchase.
Registering Your Vehicle in South Dakota
Now that we understand the types of taxes associated with owning a vehicle in South Dakota, let’s take a closer look at registering your vehicle and the fees involved.
Registering your vehicle in South Dakota is a simple and straightforward process. However, it is important to know the required documents and fees involved before you get started.
Required Documents
When you register a vehicle in South Dakota, you will need to provide several documents. These include the vehicle title and your driver’s license. You may also need to bring a bill of sale for the vehicle, if you recently purchased the vehicle or you have owned it less than two years.
It is important to note that if you are registering a vehicle that was previously registered in a lower tax state, you will need to provide additional documentation. This may include a NADA value report or the original sales contract.
Registration Fees
The amount you pay in registration fees depends on several factors, such as the type of vehicle, its age, the empty weight, and the county where you live. You will need to pay an initial registration fee which may pro-rated, depending on your last name and the month you initially register the vehicle.
For example, the initial registration fee for a light duty pickup truck is $144, while the registration fee is approximately $108 for a SUV. If you own a large commercial-type truck, the fees may be lower and are based on the gross weight.
It is important to keep in mind that if you do not title and register your vehicle on time, you may be subject to late fees and penalties.
Renewing Your Vehicle Registration
In South Dakota, you must renew your vehicle registration annually. You will receive a renewal notice in the mail approximately 90 days before your registration expires.
To renew your registration, you can do so by phone, by mail, or in person at your local county treasurer’s office. If you choose to renew by phone, you will need to have your vehicle’s license plate number and a valid credit card.
If you have any questions about the renewal process, you can contact SD PL8S for assistance.
South Dakota Vehicle Sales Tax
When you purchase a vehicle in South Dakota, you will be required to pay a sales tax based on the vehicle’s purchase price. Let’s take a closer look at how this tax works.
South Dakota is a state that prides itself on its low taxes. However, when it comes to purchasing a vehicle, there are some taxes that you will need to pay. The sales tax on vehicles is one of them. The sales tax is a one-time fee that you will need to pay when you purchase a vehicle. The amount of the tax is based on the purchase price of the vehicle, including any accessories, extended warranties, and delivery fees. Trade-in value lessens the tax burden.
Sales Tax Rates
The sales tax rate for vehicles in South Dakota is currently 4%. This means that if you purchase a vehicle for $20,000, you will owe $800 in sales tax. However, if you purchase the same vehicle and trade in a vehicle valued at $5,000, you will owe $200 in sales tax. Your are only taxed on $15,000.
If you paid less than 4% tax of the current value of the vehicle, South Dakota will assess taxes for the difference. The following states charge less than 4% and vehicles will therefore be taxed on the current NADA value and charged the following tax percentage (difference):
Alabama 2%
Alaska, Montana, and New Hampshire 4%
Oregon 4% for titles issued before January 2018, 3.5% for titles issued after January 2018
North Carolina 1% (and difference beyond $2000 NC cap on motorhomes)
South Carolina - tax paid on the difference if tax owed to SD is over $500 (based on a 5% rate)
How to Calculate Sales Tax
To calculate the sales tax on your vehicle purchase, you will need to multiply the purchase price by the sales tax rate. For example, if your vehicle purchase price is $20,000 and the sales tax rate is 4.0%, you will owe $800 in sales tax.
It’s important to note that the sales tax is based on the purchase price of the vehicle, minus the trade-in value. So, if you are trading in a vehicle(s) and purchasing a new one, you will pay sales tax on the purchase price of the new vehicle, including all accessories/fees, minus the trade value.
Sales Tax Exemptions
There are several situations where you may be exempt from paying sales tax on your vehicle purchase. You may be exempt if you are a nonresident who purchases a vehicle in South Dakota and immediately removes it from the state. This exemption applies if you are not a resident of South Dakota and you purchase a vehicle in the state, but you do not plan to register the vehicle in South Dakota or use it in the state.
It’s important to note that there are limited tax exemptions for purchasing a vehicle for personal use. So, if you are a resident of South Dakota and you purchase a vehicle for personal use, you will need to pay the 4% sales tax.
Conclusion
As you can see, owning a vehicle in South Dakota comes with several tax-related responsibilities. By understanding these taxes and fees, you can ensure that you are meeting all of your obligations and avoiding any potential penalties. If you have questions about vehicle taxes in South Dakota, don’t hesitate to contact your SD PL8S for more information.
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