Department of Revenue system charged wrong amounts in some vehicle tax transactions, audit finds

PIERRE — South Dakota’s online 605Drive vehicle title and registration system charged incorrect tax amounts in some transactions, a new audit report found.

The state’s Department of Revenue, which is responsible for the system, began using it in February 2025. The audit found some vehicle trade-in values were incorrect in the system, affecting taxable values during calculations.

Auditors tested 112 out of a total of 750,005 transactions from July 2024 through June 2025. That sample of transactions totaled $139,171, including fees and a 4% tax on the purchase price of a vehicle. Three of the transactions resulted in tax overpayments totaling $1,400.

Former state employee sentenced in fake vehicle title case

Auditors recommended the department thoroughly review the system’s titling and registration processes and identify and refund any additional overpayments.

Upon the department’s internal review of the same pool of 750,005 transactions, the department found 604 that were impacted during a data transfer from the past system to the current system, the department said.

Out of those reviewed transactions, the department found nine additional errors that resulted in about $1,450 in refunds, 24 errors in which taxpayers owed a collective $4,200, and 56 other documentation errors that didn’t have financial impacts.

Refunds have either been processed or are actively being processed. The department did not say whether underpayments will be collected.

Last year, a state audit of the department found it collected about $530,000 in commercial vehicle fee overcharges, affecting more than 11,000 South Dakota vehicles.

In 2024, state Attorney General Marty Jackley said a deceased former three-decade employee of the department had allegedly created 13 fake vehicle titles to help her secure $400,000 in loans. No charges were filed, because the former employee died before her alleged behavior came to light.

Two more former department employees were later convicted of similar accusations. One conviction was for grand theft by deception for creating a fake vehicle title that the employee used as proof of a trade-in to avoid taxes. The other employee was convicted of misprision of a felony, which means the person failed to report knowledge of the other’s crime.