Not a Taxing Situation

When customers order items from your online store, you obviously need to wrap and box them carefully for shipping. When you purchase shipping materials from a supplier, be sure to check the bottom line to see if you’re being charged sales tax.
 
Why? Because online businesses located in South Dakota generally don’t owe sales tax when they buy the packaging materials used to ship customer purchases as long as:

1. The retailer is using the containers and wrapping materials to hold other tangible personal property sold by the retailer, and
2. The boxes, bubble wrap, etc. are supplied free by the business as a convenience to the customer

The tax exemption pertains to items such as:​

• boxes
• cartons
• lids
• wrapping paper
• labels
• packing cases
• bags
• containers
• twine
• glue​
• bottles
• shipping case

• wrapping film
• strapping
• rope
• tape
• cans
• pads
• dividers
• stockinette
• casings
• and similar articles and receptacles used or consumed by manufacturers, processors, or fabricators

MORE INFORMATION

• Call the South Dakota Department of Revenue at 800-829-9188