Sioux Falls, SD Local Taxes & Fees: Business Tax Classification (2026)
Key Facts
- 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
Summary
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.
Notwithstanding the rate of tax established in §§ 37.001 and 37.002, from and after March 1, 1992, the rate of tax upon sales of leases or rentals of hotel, motel, campsites or other lodging accommodations within the city for periods of less than 28 consecutive days; sales of alcoholic beverages as defined in SDCL 35-1-1; sales of establishments where the public is invited to eat, dine or purchase and carry out prepared food for immediate consumption; ticket sales or admissions to places of amusement, athletic or cultural events is 3%. Any revenues received from the tax imposed in this section in excess of 2%, but not more than 3%, shall be used only for the purpose of land acquisition, architectural fees, construction costs, zoo maintenance and operational expenses, and payment for an entertainment center and a convention center, including maintenance, staffing and operations of these facilities and the promotion and advertising of the city, its facilities, attractions and activities. (1992 Code, § 39-17) (Ord. 51-79, passed 6-4-1979; Ord. 99-91, passed 12-23- 1991; Ord. 150-95, passed 12-4-1995; Ord. 79-10, passed 12-13-2010)
Official source re-checked September 7, 2026: no newer edition of the code had been published (publisher’s edition: 2026 S-135: Current through local ordinance 54-26, passed 7-14-2026).
Full Breakdown
Sioux Falls imposes a base 2% municipal retail occupational sales and service tax on gross receipts of businesses subject to the state sales tax (§§ 37.001, 37.002). A separate classification carves out four business types for a higher 3% rate: short-term lodging under 28 days, alcoholic beverage sales, dine-in or carry-out prepared food sellers, and ticket/admission sales to amusement, athletic or cultural events (§ 37.003). Vending machine receipts are capped at a 1% rate regardless (§ 37.006). The South Dakota Department of Revenue collects all of it alongside the state sales tax (§ 37.005).
Violations & Fines
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.
Frequently Asked Questions
Which Sioux Falls businesses pay the higher 3% tax rate?
Does Sioux Falls collect this business tax itself?
Sources & Official References
Other rules in Sioux Falls
Compare Sioux Falls to another location·View the South Dakota local taxes & fees overview
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