Buying a used car can save you some cash, but don’t forget about sales tax, known in South Dakota as “Motor Vehicle Excise Tax,” or MVET. South Dakota charges 4% MVET on vehicle purchases.
Unlike many other states, South Dakota doesn’t have local sales taxes; 4% is the most you’ll pay in tax on your vehicle purchase.
Keep reading to get the full scoop on South Dakota sales tax liabilities for your used car purchase.
Do you Pay Sales Taxes When you Purchase a Vehicle From a Private Party in South Dakota?
When you buy a car in South Dakota, you’ll pay 4% of the vehicle’s purchase price, whether you buy from a private seller or a car dealer. South Dakota's tax law does not discriminate between the two.
Unless you qualify for a tax exemption (covered below), you’ll owe tax on your vehicle purchase.
How is Used Car Sales Tax Calculated in South Dakota ?
Motor vehicle excise tax is a percentage of a car's purchase price owed to the state of South Dakota when you buy a car and register it in South Dakota.
The county treasurers establish what the car is worth on the open market by referring to Kelley Blue Book, NADA, or other reliable sources on used car prices. If they conclude that the car's Kelley Blue Book value is greater than its purchase price, they can opt to base tax on the Kelley Blue Book or NADA assessed value.
It is important to note that underreporting the purchase price of a vehicle in order to avoid paying sales tax is illegal.
How to Pay South Dakota Vehicle Sales Tax
After buying a car from a private seller, you will pay the sales tax. Here is how to do it:
- To transfer ownership of the vehicle, you and the seller must complete the necessary paperwork, including the bill of sale (when you buy a used car on PrivateAuto, we provide an official South Dakota bill of sale and prompt both of you to sign it in our app at the appropriate stage of the transaction process). You'll need the following documents to transfer car ownership in a private transaction:
- The original car title.
- Proof of valid car insurance.
- Valid driver’s licenses, ID or passport.
- Calculate the amount of sales tax due. Multiply the vehicle's purchasing price by 4%.
- Submit payment for all taxes and fees.
- Get payment proof from the South Dakota county treasurer's office.
- Get your registration, title, and new license plates. Once you've paid the sales tax and turned in the necessary documentation, you'll get your new registration and title for the car. The title and registration will show that you bought the car and that the sales tax has been paid. You will get your new license plates in the mail.
How to Avoid Paying South Dakota Vehicle Sales Tax?
Motor vehicle tax is something you can't avoid—it's a part of our lives. You are required by law to pay sales tax on private used car purchases in South Dakota or any other state that charges sales tax—unless you meet a sales tax exemption.
South Dakota Car Tax Exemptions
According to the South Dakota DOR's "Motor Vehicle Exemptions" PDF, the following types of vehicle transactions are exempt from the state's sales tax:
- Vehicles owned by government entities, schools, tribes, non-profits, fire departments, church buses, or farm vehicles.
- If you inherit a vehicle.
- When you and a friend share a vehicle and it gets transferred to one of you without paying.
- Vehicles transferred for free between spouses, parents and children, or siblings.
- When companies merge and transfer vehicles between them.
- Transfers between you and a corporation, if you own most of it, or when a corporation is ending and giving out its vehicles.
- If you own most of a partnership and you transfer vehicles between you and the partnership.
- If a business sells most of its stuff, including vehicles.
- Between companies if the same people own most of both companies.
- If you're a debt collector or lienholder and you acquire a vehicle to settle a debt.
- Vehicles transferred to a non-dealer, but previously registered.
- Old vehicles (11+ years) or boats sold for $2,500 or less.
- Out-of-state vehicles in the name of a car dealer. The first sale of such a vehicle is taxable.
- Vehicles given by a person to their trust or from a trust to a beneficiary.
- Vehicles or heavy trailers rented for short periods.
- Vehicles donated by non-profit organizations.
- Vehicles titled to an insurance company that doesn't pay the usual 4% tax.
- Vehicles that only have a title and aren't used on public roads or waters.
- If the vehicle owner already paid tax.
- If you're moving to South Dakota with a vehicle from a state with a similar tax.
South Dakota Vehicle Sales Tax Calculators
If you're in the market for a used vehicle, you'll need to calculate the amount of sales tax you'll be required to pay. Calculating sales tax has never been easier than with our used car sales tax calculator.
This free online calculator determines how much tax you must pay on a used car purchase based on your tax rate (4%) and your vehicle's purchase price.
What if I’ve Already Paid Vehicle Sales Tax in Another State?
When you buy a vehicle out-of-state and register it in South Dakota, the state will levy a 4% MVET. South Dakota wants to make sure that cars purchased in the state and cars brought into the state are taxed equally.
If you paid sales tax in another state on your vehicle purchase, South Dakota will usually deduct the other state's tax so that you aren't taxed twice. There are three potential scenarios.
- You paid exactly 4% sales tax in Wyoming or one of the states with the same 4% sales tax rate as South Dakota, in which case South Dakota will give you a pass.
- You paid no sales tax in another state, in which case you owe the full 4% South Dakota sales tax. Let's say you bought a used car in Montana and didn’t pay any sales tax, given Montana’s 0% tax rate. You’ll pay South Dakota’s full 4% sales tax.
- You paid less than 4% sales tax in another state, in which case South Dakota charges you the difference. Let’s say you bought a used Jeep Wrangler in Colorado for $25,000. Colorado’s tax rate is 2.9%, so you paid $725 (.029 X $25,000) in Colorado tax. When you go to register cars in South Dakota, your total tax bill will be $1000 minus the $725 you already paid in Colorado, for a total due of $275 to South Dakota.
- You paid more than 4% in the other state (for example, Nebraska levies a 5.5% tax on cars). We wish we could tell you South Dakota will give you a refund, but no. At least they won’t charge you any more tax.
South Dakota Registration, Title and License Plate Fees
In addition to the state sales tax, you may owe other fees when buying a car and registering it in South Dakota, such as a car title fee and registration fee.
To register your vehicle at the South Dakota county treasurer's office, you must show proof of valid car insurance. The first time you register a passenger vehicle, you will need to do the title transfer, which will cost you $10.
The South Dakota license plate fee is $15 in addition to the registration fee. A personalized plate costs $50 in addition to the registration fee.
For the full scoop on South Dakota license plate and vehicle registration costs, see the South Dakota DOR page.
Is Buying a Car from a Dealer Better?
Many people believe that buying a car from a dealership is a magical way to avoid all of the hassle (and possibly some fees). In fact, going to a South Dakota dealer will cost you more money and is not particularly convenient, unless you enjoy spending three hours in a car dealership.
- Dealerships charge documentation fees above and beyond all the other taxes and fees you have to pay (which are exactly the same whether you buy from a dealer or a private seller). The average documentation fee in South Dakota is $115.
- Dealers usually charge higher prices for used cars. Their business model is based on buying as low as possible and selling as high as possible to make the spread that keeps them in business. Cut out the middleman and go directly to private sellers to get the best deals.
We do admit that dealers bring a certain amount of convenience that you don’t traditionally get when you buy from a private seller. In fact, that’s why we exist. We give you dealer-like convenience in the palm of your hand while allowing you to transact peer-to-peer with regular folks like yourself.
When you shop for used cars from private sellers on PrivateAuto, you can avoid document fees and get lower prices.
Buy Or Sell a Car Online With PrivateAuto
PrivateAuto is the only transactional marketplace where you can easily and conveniently buy and sell used cars and get the deal done from start to finish.
Our innovative platform connects buyers and sellers and gives them all the tools to complete the deal, from in-app car financing to secure messaging to integrated payments. You can also schedule a test drive and negotiate the price without ever disclosing your personal information.
Here’s how you can sell your vehicle in South Dakota with a few simple steps:
You’ll need your vehicle title and other documentation. Have all the paperwork you need to sell your car privately, so you’re not scrambling to find it at the moment of completing a sale.
- Register on PrivateAuto and get verified
To make PrivateAuto a safe place for everyone, we require email, phone, and driver’s license verification, including facial recognition.
- List your car
Easily create your PrivateAuto listing. We include a window brochure with a QR code scannable to your listing.
- Set your terms
You can control where, when, and who you meet. Decide whether to accept only ID-verified buyers, or buyers with verified funds. Don’t waste your time with buyers who aren’t verified according to your preferences.
- Vet incoming offers
Manage offers in one place with the ability to accept, reject, or counter offers within the app. Listing on multiple sites? Filter all communications through PrivateAuto by sharing your listing link on all platforms. Your personal information is protected: no more giving out your phone number or email address. All communication happens in our app.
- Choose a buyer
When you find an offer you like, accept it and proceed to the next step with that buyer.
- Schedule a meeting
The buyer will want to look at your car. No more back-and-forth texts. You never have to give out your phone number. Rather, use our handy scheduling feature to schedule test drives and coordinate a time and place for meetings. (Oh, and you’ll be able to finalize the transaction instantly at the first meeting, FYI.)
- E-sign documents
After the buyer is satisfied with your car and the two of you have agreed on a purchase price, you can easily e-sign the bill of sale within our app, from your phone. With our shared documents feature, you can easily locate the paperwork needed after the sale.
- Get paid, instantly
Before PrivateAuto, receiving funds was the most stressful part of the entire selling process, especially for any used car sale over $5,000. There just aren’t a lot of good ways to move large amounts of money quickly and conveniently. Those days are over! Verify and receive funds instantaneously with PrivateAuto Pay, our innovative banking integration. Guaranteed funds for transactions large and small.
- Transfer title
When you sell your vehicle, fill out the necessary information on the back of the certificate of title and sign it in order to transfer ownership of the vehicle to the new owner.
South Dakota's Sales Tax FAQ
Which state has the cheapest car tax?
The states with the cheapest car tax are Alaska, Delaware, Montana, New Hampshire, and Oregon, with a tax rate of zero. Nevada has a zero tax rate on private-party car sales, though not on dealership purchases.
With the exception of the above states, all US states charge sales tax on private-party car purchases. Oklahoma, North Carolina, Colorado, and Alabama charge 4.5% or less vehicle sales tax.
How to transfer a vehicle's title in South Dakota?
For privately bought vehicles in South Dakota, the seller must provide you with the following documents:
Completed certificate of title
Completed the odometer disclosure section on the application for motor vehicle title and registration (Form MV-608)
Complete a bill of sale (Form MV-016)
Proof of lien (if applicable)
Once the seller has provided you with all the paperwork, you need to visit your local South Dakota county treasurer and submit the following:
All paperwork provided by the seller
A completed application for motor vehicle title and registration (Form MV-608)
- Payment for 4% sales tax
- Payment for title transfer fee: $10
For more information about title transfers, read our South Dakota title transfer guide.
Does Sioux Falls charge additional excise taxes?
Since South Dakota has no additional local sales tax, the tax rate in Sioux Falls is 4%.
What is the South Dakota DOR?
The South Dakota Department of Revenue (DOR) is the state agency in charge of all state taxes, including sales and use tax, income tax, and property tax. The Department of Revenue also issues your South Dakota drivers license and vehicle registrations.
Does Pennington County charge county sales tax?
Pennington County doesn't charge county taxes. Counties in South Dakota don't change any additional sales tax on cars purchased in South Dakota.