Sioux Falls, SD Accessory Structures: ADU Rental Restrictions (2026)

Sioux Falls adopted a citywide residential rental permit program effective January 1, 2024, codified at § 150.177. Any property owner who allows occupancy of, advertises for occupancy, solicits occupants of, or lets to another person any residential rental unit (including an ADU) must obtain a permit. Long-term rentals (30+ days) require a one-time, two-hour city-approved training. Short-term rentals — defined as any home, cabin, or similar building rented to the public for more than 14 days in a calendar year while not owner/manager-occupied — fall under § 159.303 (Vacation Home Rental/Short-Term Rental) where applicable and require proof of a South Dakota Department of Revenue sales tax license and a state lodging license before the city permit issues. Short-term rental gross receipts are subject to (a) 4.2% state sales tax (SDCL Chapter 10-45), (b) 2% Sioux Falls municipal sales tax (SDCL Chapter 10-52), (c) 1.5% state tourism tax (SDCL Chapter 10-45D), and (d) 1% Sioux Falls BBB (lodging) tax under SDCL Chapter 10-52A. Most marketplace bookings via Airbnb/Vrbo are collected and remitted by the platform. As of 2026, South Dakota has not enacted statewide STR preemption — local ADU rental rules control.