In the state of South Dakota, there is a sales tax on escrow and settlement service fees. This includes a state sales or use tax of 4.2%, along with a 1–2% municipal sales or use tax.
The amount of the use tax is dependent on the location of the closing or the customer's billing address, and also dependent on the services provided by the title or abstract company for the specific transaction.
Given that both the location of the closing is not included in the customary property and transaction details required by LodeStar's calculator, and the extent of services provided by the title or abstract company is not specified, we default to the highest rate statewide, a flat 6.2%.
When quoting fees in LodeStar, the South Dakota Sales Tax will appear in Section C as follows:
For more information, please download the attached file from the South Dakota Department of Revenue.