South Dakota wrote the law that changed online sales tax nationally. Its own rule has since gotten simpler.

The Bottom Line for South Dakota eBay Sellers

An LLC doesn't resolve either open question South Dakota has left about marketplace sellers. It changes who carries the risk while those questions stay open. Forming one moves potential exposure from you personally to the entity, which matters more, not less, in a state whose current guidance has real gaps.

South Dakota's Department of Revenue is direct about what it does administer: a gross-sales dollar threshold for remote sellers, with the transaction-count prong that made this state famous now repealed. What its current bulletins don't directly answer is whether a seller must include eBay-facilitated sales when measuring its own exposure to that threshold, or whether a marketplace-only seller needs its own registration at all, older department guidance addressed both more plainly, but that language has dropped out of the current publications. An LLC doesn't change either underlying rule; it changes what happens to your personal assets if South Dakota later resolves an open question against you.

We could not confirm South Dakota's position on whether a marketplace-only seller must register. We could not confirm whether South Dakota counts marketplace-facilitated sales toward its remote-seller threshold. South Dakota uses the federal reporting threshold, so eBay issues a 1099-K once you pass $20,000 and 200 transactions.

eBay Collects South Dakota Sales Tax. What Is Still Yours?

We could not confirm South Dakota's position on whether a marketplace-only seller must register.

South Dakota's marketplace bulletin explains that a facilitator over the threshold must hold its own license, and separately notes that a marketplace seller who independently meets the state's remote-seller law may also need to register, but it stops short of saying whether volume that eBay is already collecting on is what would push a seller over that line. Older department guidance told marketplace-only sellers plainly that they didn't need to register; that specific sentence isn't in the current bulletins anymore, and there's no clean replacement statement either way. Until South Dakota clarifies this, a seller who sells exclusively through eBay has a reasonable argument for holding off on a South Dakota registration, but should treat that as a judgment call rather than a settled answer, and revisit it the moment a second sales channel enters the picture.

Do Your eBay Sales Count Toward South Dakota's Nexus Test?

We could not confirm whether South Dakota counts marketplace-facilitated sales toward its remote-seller threshold.

This is the state whose economic-nexus statute produced the U.S. Supreme Court's Wayfair ruling, so it draws outsized attention from sellers everywhere, but the rule itself has moved since that case. South Dakota repealed the transaction-count test years ago, leaving one plain dollar figure as the only trigger. What the department's current bulletins don't resolve is whether marketplace-facilitated sales get folded into that dollar count when a seller asks whether it independently crosses the state's line; the guidance that exists addresses how a marketplace provider aggregates its sellers' volume for the provider's own registration, and how an in-state business is relieved of remitting on sales eBay already collects on, neither of which answers this specific question. Track your non-eBay South Dakota sales separately regardless, since those count toward the threshold no matter which way the open question eventually resolves.

South Dakota's 1099-K Threshold

South Dakota uses the federal reporting threshold, so eBay issues a 1099-K once you pass $20,000 and 200 transactions.

South Dakota has no personal or corporate income tax, and its Department of Revenue has no income-tax division to administer a state-level 1099-K program layered on top of the federal one. A 1099-K reaching a South Dakota seller is purely a federal filing event, the state isn't independently collecting a copy or checking it against anything. That doesn't make the form meaningless: it's still going to the IRS with your gross payment volume on it, and reconciling that gross figure against your actual net (fees, refunds, cost of goods), is the step that turns an intimidating number into an accurate one, regardless of which government eventually looks at it.

Buying Inventory to Resell in South Dakota

South Dakota accepts a resale certificate issued by another state, so you can buy inventory for resale without registering here first.

SD is a Streamlined Sales Tax (SST) full member state; its own DOR guidance gives a worked example of an out-of-state seller (Montana antique dealer, no SD permit) buying for resale in SD using an exemption certificate with FEIN/driver's license in lieu of a permit number.

South Dakota's own exemption-certificate guidance is unusually direct about welcoming out-of-state resellers: the department's published example describes an out-of-state antique dealer with no South Dakota permit buying inventory here using a Streamlined multistate certificate, listing an EIN or driver's license number instead of a state-issued permit number. South Dakota is a full Streamlined Sales Tax member, and a supplier here generally shouldn't need you to hold your own state registration before extending resale pricing. On secondhand goods, the only used-property statute the state has is scoped to pawnbroking and licensed at the municipal level, not the state level, an eBay reseller flipping thrifted or estate-sale inventory isn't stacking a state secondhand-dealer license on top of the tax questions above.

South Dakota has no statewide second-hand dealer licence reaching general resale. SD's only dealer-in-used-goods statute located is SDCL Chapter 37-16, titled 'Pawnbrokers.' Section titles obtained from the legislature site (37-16-3 'Conduct of business without municipal license as misdemeanor'; 37-16-4 'Sale of pledge'; 37-16-5 references stolen goods) show the chapter governs pledge/loan (pawn) transactions, not outright purchase-and-resale of ordinary used goods by a reseller, and that licensing under this chapter is municipal rather than statewide. No separate statewide 'secondhand dealer' or 'junk dealer' licensing chapter was found in Title 37. Per the scoping rule, a pawnbroker-only statute that does not reach general resale of ordinary used goods is coded 'none.'

Setting Up to Sell on eBay from South Dakota

1. Track eBay sales separately from everything else, starting now

   Because it's unresolved whether marketplace-facilitated sales count toward your own South Dakota threshold, keeping a clean running total of your off-eBay sales means you'll have the number the moment it matters, instead of reconstructing it later.

2. Form the LLC while volume is still manageable

   Two of South Dakota's own rules for marketplace sellers are genuinely unsettled right now. That's exactly the situation where the liability shield an entity provides is worth having before, not after, a dispute forces the question.

3. Call the Department of Revenue before assuming no registration is needed

   Older guidance said marketplace-only sellers didn't need to register; that language is gone from current bulletins. A phone call gets you the department's current position, not a stale one from a search result.

4. Use a Streamlined exemption certificate for South Dakota wholesale buys

   South Dakota's own guidance confirms an out-of-state reseller with no state permit can still buy for resale here using a multistate certificate and an EIN, so don't assume you need in-state registration first.

5. Revisit the registration question if you add a non-eBay channel

   Direct sales outside a marketplace unambiguously count toward South Dakota's threshold. Adding any such channel is the moment to re-check your registration status against current department guidance.

What We Could Not Confirm for South Dakota

These pages only state what a primary source establishes. For South Dakota we could not confirm the following, so this page does not answer it:

• whether a marketplace-only seller must register
• whether marketplace sales count toward the economic-nexus threshold

Who to Ask in South Dakota

The South Dakota Department of Revenue's Business Tax Division handles remote-seller and marketplace registration questions and is the right place to ask directly about the open questions this page discloses rather than guess. The Secretary of State's office is the office that forms and maintains your LLC once you're ready to file. South Dakota's own codified-laws search tool is difficult to use for a layperson, so a phone call to the department tends to resolve a specific fact pattern faster than trying to research the statute yourself.

Sources

• https://dor.sd.gov/media/yh0n3oc2/remote-seller-bulletin.pdf
• https://dor.sd.gov/media/e0ajtwlg/marketplace-provider-bulletin.pdf
• https://www.irs.gov/pub/irs-pdf/p1220.pdf
• https://dor.sd.gov/businesses/taxes/
• https://dor.sd.gov
• https://dor.sd.gov/media/q0xpvden/exemption-certificate.pdf
• https://dor.sd.gov/businesses/taxes/sales-use-tax/
• https://sdlegislature.gov/Statutes/37-16
• https://sdlegislature.gov/api/Statutes/37-16.html
• https://www.irs.gov/instructions/i1099k

Federal 1099-K threshold: IRC § 6050W(e), as amended by § 70432(a) of the One, Big, Beautiful Bill Act (P.L. 119-21, July 4, 2025). A third-party settlement organization such as eBay must file Form 1099-K only if BOTH tests are met for the calendar year: gross payments exceed $20,000 AND the number of transactions exceeds 200. These are the figures for tax year 2026. There is no forward phase-in: § 70432(a) takes effect "as if included in section 9674 of the American Rescue Plan Act," so the same $20,000 / 200 figures apply retroactively to calendar years after 2021 (tax years 2022 through 2026 alike). The $600 threshold enacted by ARPA § 9674 (P.L. 117-2) was repealed before it operated, and the IRS transition-relief thresholds previously announced for 2024 and 2025 are superseded. A platform may issue a 1099-K below these figures, and a state may set a lower TPSO threshold, in which case a seller can receive a 1099-K without meeting the federal test.. Verified 2026-08-08.