Since January 1, 2016, licensed wineries have been able to make direct-to-consumer (DtC) sales in South Dakota, the latest state to open up. To comply with South Dakota’s DtC rules, wineries are required to file shipping reports and remit sales and excise taxes quarterly. This means that the first reports will be due very soon, by April 15th. All reports must be filed online, and must be filed even if no shipments were made in the previous quarter.
There are three parts to this quarterly filing that wineries will need to comply with: filing a shipping report; filing and paying excise taxes; and filing and paying sales taxes.
- Shipping Report: South Dakota is using an online platform (“EPath”) to receive the shipping reports – there is not a paper or email option for this report. A winery will need an EPath account.
- After logging into EPath, a winery will select the “file a return” option and then select their Direct Shipper’s License type.
- From there, the winery will either manually enter in their shipping data, or upload a CSV (comma-separated value) file, which will contain the relevant data, including the recipient’s name and address, date of shipment, type and brand of wine shipped, cost of the wine, and the taxes collected on that shipment.
- ShipCompliant clients are able to subscribe to a quarterly shipping report, which will generate a CSV file with the data for the previous quarter.
- Excise Taxes: South Dakota requires DtC shippers to pay excise taxes depending on the amount of wine they sell on a quarterly frequency. Excise tax rates vary depending on the ABV of the product. Excise taxes for DtC shippers are calculated and reported within EPath only. Based on the data a winery has entered into EPath, either manually or through the CSV file, an Excise Tax Report will automatically generate. This report will indicate the amount of excise taxes due, including the state’s 2% Occupational Tax for wine shipments, and allow the winery to pay the taxes online.
- Sales Taxes: For DtC sales, all applicable sales taxes need to be reported and remitted. These include the base 4% state rate and local taxes, and are based off both the price of the wine and the cost of shipping. DtC shippers are, in particular, required by the state’s rules to file their sales taxes online, and may not mail in a paper filing. Instead, sales taxes are to be reported and remitted in EPath.
- After submitting their Shipper’s Report and Excise Tax Report under their Direct Shipper’s License, a winery will need to go back to the EPath homepage and again select “file a return.”
- At this point, however, the winery should select their Sales Tax License type; this will redirect to the sales tax section of EPath, where the sales taxes due may be reported and remitted.
- The report used in EPath mimics the state’s ST sales tax form, and a winery may use that form to fill in the EPath report. ShipCompliant clients will have access to an ST form to use for reference—however, they should not mail in the ST form and instead should only use it for reference within the EPath platform.
All of these reports and payments must be made by the 15th of the month, after every quarter (so in April, July, October, and January). The state has indicated that April 15th will be a hard deadline for the first filing, so all wineries who have begun making DtC sales should be aware of and prepared for this deadline.
ShipCompliant clients will have these reports available in their accounts—both the Shipper’s Report to submit to the state; and the ST form, to use as a reference when filling out the EPath report. If you need further assistance, please contact support.