How Sioux Falls Handles Local Taxes & Fees: A Practical Guide
Sioux Falls maintains 135 local ordinances across all categories, and 2 of those deal specifically with local taxes & fees. Here is a breakdown of what the city actually requires, what is prohibited, and where Sioux Falls falls on the strict-to-permissive spectrum compared to other cities.
Vacancy Tax
Sioux Falls charges owners of vacant buildings an annual fee starting at $1,000, doubling to $2,000 in historic districts, with $1,000 increases each subsequent year the building stays empty.
Key details: First-year fee: $1,000 (non-historic). Historic district fee: $2,000 first year. Annual escalation: +$1,000 each additional vacant year. Registration deadline: 30 days after building becomes vacant. Governing sections: City Code §§ 150.155-150.161.
Missing the 30-day registration window or the annual fee deadline puts the owner in violation of the vacant-building subchapter, and the fee must still be paid before any building permit issues.
Business Tax Classification
Sioux Falls taxes most businesses at a 2% municipal sales tax, but classifies lodging, alcohol, restaurants and amusement admissions into a higher 3% bracket under City Code § 37.003.
Key details: General business rate: 2% of gross receipts. Elevated class rate: 3% (lodging, alcohol, food, tickets). Vending machine rate: capped at 1%. Collected by: SD Dept. of Revenue.
Uncollected or unremitted tax is enforced through the state sales tax collection process administered by the SD Department of Revenue under § 37.005, not a separate city penalty schedule.
The Bottom Line
Sioux Falls's local taxes & fees rules are a mixed bag. Some areas are strict, others are relaxed, and the details matter. The best approach is to check the specific rule that applies to your situation rather than assuming Sioux Falls is broadly strict or permissive.
Keep in mind that Sioux Falls can amend these rules at any council meeting. For the most current version of any rule mentioned here, check the specific ordinance page, where we track updates as they happen.