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South Dakota Basic Business Taxes

Q1 2014
Corporate income tax:
South Dakota has no corporate income tax.

Personal income tax:
South Dakota has no personal income tax. Owners of non-incorporated businesses who reside in South Dakota pay no personal income tax on their profits from their South Dakota business operations.

Sales and use tax:
South Dakota levies a 4 percent occupational retail sales tax on the retail sale of tangible personal property and on most services. Tangible personal property purchased for resale and materials incorporated into products for resale are exempt from sales tax.

Real property tax:
A property tax on real property is levied at the local level. Local tax rates are usually between 1-4 percent. The equalization rate is set at 85 percent of market value.

Property tax abatement:
Local county boards may provide an abatement for new industrial or commercial structures and additions to existing structures valued at more than $30,000, and for renovated or reconstructed structures to which $10,000 or more in value has been added. With abatements, property may be valued at 0-100 percent of the assessed value for one to five years.

Personal property tax:
There are no personal property taxes in South Dakota.

Renewable Energy Property Tax Exemption:
Facilities that generate electricity using wind, solar, hydro, hydrogen generated by another eligible resource, or biomass resources are eligible for a property tax exemption, as are facilities that generate other forms of energy using solar or geothermal resources.

For eligible facilities less than five megawatts (MW) in capacity, all real property used or constructed for the purpose of producing electricity is assessed in the same manner as other real property. However, the first $50,000 or 70% of the assessed value of eligible property, whichever is greater, is exempt from the real property tax. For geothermal systems that produce thermal energy, but not electricity, this exemption is limited to the first four continuous years for residential systems and to the first three continuous years for commercial systems.

South Dakota State Contact:
J. Pat Costello, Commissioner
Governor's Office of Economic Development
711 E. Wells Avenue
Pierre, SD 57501-3369
(605) 773-3301

Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.

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