TAX INFORMATION

The Black Hills of South Dakota are home to America’s most famous “great faces” – those found on Mt. Rushmore National Memorial. We’re also home to many companies that are experiencing “great profits” as a result of the state’s outstanding business climate.

Top-notch telecommunication systems, an available, professional workforce, and unlimited training opportunities are three of the factors prompting people to take a second look at the Black Hills of South Dakota. Here are several more:

Tax Foundation Ranks South Dakota Near Top in Purchasing Power

What is happening in South Dakota that has decision-makers in other states talking?

CNBC Recently Named South Dakota #1 in Business

South Dakota has:

  • NO Corporate Income Tax
  • NO Personal Income Tax
  • NO Personal Property Tax
  • NO Inventory Tax
  • Competitive workers compensation rates
  • Lowest average unemployment insurance rates
  • Right-to-Work State
  • Fourth lowest overall crime rate in the nation
  • An average commute time of 13.8 minutes
  • Number one high school graduation rate in the nation
  • Leads the nation in manufacturing job growth

And the benefits of doing business in South Dakota are even better for companies in the telecommunications industry.

South Dakota has:

  • No sales/use tax on interstate phone calls
  • No restrictions on interest rate charges
  • No restrictions on late fees
  • No restrictions on hours telemarketers allowed to call
  • No registration
  • No asterick laws
  • One party consent recording

Sales Tax

 

State

4%

City

2%

Tourism Tax

1%

Real Property Tax

The school levy varies depending on the property’s classification. Businesses receive the non-ag. rate specified below.

 

County

5.1463

Water

.0350

City

3.3041
(.8260 for ag. property)

School (non-ag)

17.7052

The above would be the levies that apply to businesses

School (owner occupied)

10.7729

School (non-ag. Z)

9.4832

School (ag.)

8.4756

Unemployment Insurance

South Dakota average unemployment insurance rate is .9% – the sixth lowest in the nation.

STATE TAX COMPARISIONS

Overall State Per Capita Taxation 2005

Overall state per capita taxes were provided for all 50 states in 2005. South Dakota is the lowest state per capita taxes in the nation.

 

State Per Capita Taxation Rank

South Dakota

$1,430

1

Colorado

$1,640

4

Minnesota

$3,094

46

Montana

$2,004

18

Nebraska

$2,158

26

North Dakota

$2,203

29

 

Source: U.S. Census Bureau, Governments Division
States Ranked by Total Taxes and Per Capita Amount: 2005

There’s also a 2012 analysis conducted by the Tax Foundation showing South Dakota as the 2nd Lowest Taxed State in the nation. Click here for the USA Today story.

Business Inventory Tax

South Dakota does not tax business inventories. South Dakota does not impose a state property tax. And, South Dakota has not taxed personal property since 1979. In South Dakota, the only property taxes you pay for are local taxes on real property, land and buildings.

MIDWEST COMPARISON

Rapid City, South Dakota
vs.
Colorado, Minnesota, Montana, Nebraska, and North Dakota

Corporate Income Tax

 

South Dakota

NONE

Colorado

4.63%
Qualified taxpayers may pay an alternative tax of 0.5% of gross receipts from sales in or into Colorado

Minnesota

9.8%
Alternative minimum tax equal to the excess of 5.8% of Minnesota alternative minimum taxable income over the basic tax is imposed. corporations are subject to additional minimum tax ranging from $0 to $5,000 depending on MN property, payroll and sales or receipts and type of corporation.

Montana

6.75%
Taxpayers making a water’s edge election are taxed at 7%. Qualified coporations may elect to pay an alternative tax of 1/2% of gross sales in Montana during the tax year.

Nebraska

First $50,000 – 5.8%
More than $50,000 – 7.81%

North Dakota

First $3,000 – 2.6%
Next $5,000 – 4.1%
Next $12,000 – 5.6%
Next $10,000 – 6.4%
Next $30,000 – 7%
Corporations making a water’s-edge election must pay an additional 3.5% tax.

Source: Commerece Clearing House, Inc., Sate Tax Guide, February 2005

Overall State Pension Funding Comparison

Overall state pension funding is provided for all 50 states in 2012. South Dakota has one of the best funded pension systems, largely due to our state’s consistent, strong fiscal management.

Click here to compare State Pension Funding

Contact the Rapid City Area Economic Development Partnership to receive a comparison between your present location and the Black Hills. We’ll show you what doing business in South Dakota can do for your bottom line!

See how far Rapid City has climbed in Policom’s Annual Ranking for Economic Strength over the Last Decade.