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Why incorporate in South Dakota?
Business Information & Rankings
- Ranked 3rd for Best Corporate Business Climate (Pollina Corporate Real Estate, 2005)
- Ranked 1st for Best State Business Tax Climate (Tax Foundation, 2005)
- Ranked 1st for Entrepreneurial Friendliness (Small Business Survival Foundation, 2004)
- Ranked 50th for Cost of Doing Business Index (Milken Institute, 2005) ? has the lowest cost of doing business than any other state.
Cost of Living Index
| For Sioux Falls (2003): | Index Score |
|---|---|
| Composite: | 95.2 |
| Housing: | 83.1 |
| Utilities: | 120.1 |
| Misc. Goods & Services: | 98.6 |
Crime Rate
South Dakota has the second lowest crime rate in the U.S. (FBI, 2003)
Fees & Taxes
Business Inventory Tax
South Dakota does not tax business inventories.
Income and Franchise Tax
South Dakota has long held the position that if you earn money, you should be allowed to keep it. Therefore, the state does not tax corporate or personal income. Additionally, the state does not impose a corporate franchise tax.
Municipal Sales Tax
Approximately 53% of the cities/towns in South Dakota have a tax that is in addition to the state sales tax. The amount of the municipal tax varies from city to city.
Personal Property Tax
South Dakota has not taxed personal property since 1979. The only property tax you must pay is local taxes on real property, land and buildings.
Real Property Taxes
Local real property taxes in South Dakota vary from 1 ? 4% of the actual value of the structure, with most rates falling between 2-3% percent. However, five-year property tax abatements are available on new structures or additions to existing ones.
State Sales and Use Tax
Base rate: 4%
Machinery rate: 4%
A tax refund (sales, use, and contractor?s excise taxes) is available for new and expanding businesses with project costs exceeding $10 million. A refund of retail sales and service tax, use tax, and contractor?s excise taxes is also available for taxes attributed to the construction of a new business or expanded facility constructed for the processing of agricultural commodity, product or by-product. The project costs must be a minimum of $4.5 million.
Unemployment Insurance
South Dakota has the second lowest unemployment rate in the nation. The new employers’ rate is 1.9% for the first year and 1.7% for the second year.
Special Licenses, Permits and Registrations
A special license or registration at the city, county, or state level may be needed depending upon the type of business you will operate.