Disclaimer: NextBeam is not intending to provide legal advice. Please consult your own tax advisors and/or team for questions on sales tax in South Dakota.

At NextBeam we are periodically asked about sales tax exemptions in South Dakota for qualification and/or R&D work. While work done on products that are resold qualifies as tax-exempt, we must charge sales tax on qualification work on products/samples that will not be resold (e.g. dose maps, specific dosing, etc.) South Dakota is one of the few states (~10) states that do not offer exemptions for R&D or testing purchases. 

The simplest resource we are aware of explaining this is SD DOR’s Tax Fact: Exemption Certificates, located here: https://dor.sd.gov/media/q0xpvden/exemption-certificate.pdf. Specifically, commentary on the exemptions, or lack thereof, for R&D work is addressed in the “Resale” section on pages 5-6 of the document.