S.D. Admin. R. 64:06:02:85
Any commission received by a real estate broker or agent, under any type of agency agreement, is subject to the state sales tax unless the commission is otherwise specifically exempted. Any fee originating from the sale of real property sold in the state of South Dakota, regardless of the broker's or agent's residence, is subject to sales tax. Municipal sales tax applies to any sale of real property located within the municipality's limits.
S.D. Admin. R. 64:06:02:85
General Authority: SDCL 10-45-47.1(3).
Law Implemented: SDCL 10-45-5.2.
Examples:
(1) A real estate broker takes a listing on a home in Pierre. Under the multiple listing agreement, another agent sells the property. The listing broker collects the commission and the state and city sales tax. The broker then distributes the selling agent's percentage of the commission and the applicable sales tax to the selling agent. The listing broker remits state and city sales tax on that portion of the commission to which the broker was entitled. The selling agent remits state and city sales tax on the portion the selling agent received.
(2) A real estate broker takes an exclusive listing on an acreage in rural South Dakota. The broker collects the commission and state sales tax after the property is sold and remits the sales tax to the department.