South Dakota Lodging Tax: Rates, Filing, and Exemptions

Short-term lodging in South Dakota carries a stack of taxes: a 4.2% state sales tax, a 1.5% statewide tourism tax, a municipal sales tax that typically runs 1% to 2%, and in many cities an additional 1% municipal gross receipts tax on lodging. Added together, the South Dakota lodging tax you charge a guest usually lands between about 6% and 8.7%, depending on where the property sits. Every operator—hotel, motel, campground, bed-and-breakfast, or vacation rental host—needs a state sales tax license, has to file monthly through the state’s EPath system, and must keep records for three years.¹²

The Four Taxes You May Collect

A single lodging transaction can involve up to four separate taxes. The guest sees one line, but you track and report each one.

State sales tax of 4.2% on gross receipts from room and site rentals.³
Statewide tourism tax of 1.5% on lodging, campgrounds, vehicle rentals, and recreational services.²
Municipal sales tax, usually 1% to 2%, imposed by most cities on top of the state rate.⁴
Municipal gross receipts tax of up to 1% under SDCL 10-52A, which cities can levy specifically on lodging, restaurants, bars, and entertainment admissions. Not every city imposes it.⁵

In a city with a 2% municipal sales tax plus the 1% gross receipts tax, the combined rate on a qualifying stay is 8.7%. These are reported under different codes on your return, so your books need to separate them from the start.

Which Stays Are Taxable

SDCL 10-45-7 reaches almost any arrangement where someone pays to sleep somewhere short-term. The statute covers any building, structure, or property held out to the public as a place to sleep, which pulls in hotels, motels, bed-and-breakfasts, guest houses, vacation rentals, and private homes listed through booking platforms. Campgrounds where guests park tents, campers, or trailers are included under the same section.⁶

The dividing line is whether the guest is “transient,” defined as staying fewer than 28 consecutive days. Once a guest reaches 28 consecutive days in the same accommodation, the stay is no longer transient and the lodging taxes stop applying. The 1% municipal gross receipts tax follows the same cutoff by statute.⁷

If You List on Airbnb or VRBO

Marketplace platforms that facilitate more than $100,000 in gross South Dakota sales in the current or prior calendar year have been required since March 2019 to hold a license and remit applicable sales tax on behalf of hosts.⁸ That often covers the state sales and tourism taxes, but it does not necessarily cover every municipal tax, and it may not reach the 1% municipal gross receipts tax at all.

You still need your own South Dakota sales tax license, and you are responsible for any tax the platform does not remit. Confirm directly with the platform and with the city what is actually being collected before assuming you are fully covered.

Getting Your Sales Tax License

Apply for the license through the Department of Revenue’s online portal before you take your first booking.⁹ You will provide the legal business name, the physical location of the property, the planned start date, your business structure, and identification for all responsible owners or officers. Sole proprietors use a Social Security number; other entities use an EIN. Operating without a license exposes you to penalties, so get this done before the first guest check-in.⁸

Filing and Paying

Returns are filed through EPath, the state’s electronic tax portal. You enter gross receipts from lodging, and the tourism tax is reported on the same sales tax return under the city and special jurisdiction schedule using Code 700-1.¹⁰

Returns are due by the 20th of the month after the reporting period. When you file and pay electronically, the return itself is still due by the 20th, but payment can be remitted as late as the 25th.¹¹

File every period, even one with zero taxable receipts. A missed zero-dollar return is one of the quickest ways to trigger a penalty and put your license at risk.

Exemptions You’ll Actually See

Guests Who Stay 28 Days or Longer

Once the same guest hits 28 consecutive days in the same accommodation, lodging tax no longer applies to that stay.⁶ Track consecutive-day counts carefully and keep the folio documentation showing exactly when the threshold was crossed.

Government and Tribal Direct Payments

Lodging paid directly from federal government funds is exempt. The same exemption applies to purchases made directly by South Dakota state agencies, counties, cities, public schools, and recognized Indian tribes. The word that matters is “directly.” If a government or tribal employee pays with a personal card and gets reimbursed afterward, the stay is taxable. Only payments charged to a government account or paid from government funds qualify.¹²¹³ Keep a copy of the government voucher, purchase card record, or exemption certificate on file.

Exempt Nonprofit Organizations

Certain nonprofits, including nonprofit charitable hospitals and federally recognized charitable relief agencies, can purchase lodging tax-free when three conditions are met: an exemption certificate is presented at the time of purchase, payment comes directly from the organization’s funds, and title to the purchase stays with the organization. Most qualifying organizations must include an exemption number issued by the Department of Revenue (prefixes RG, RA, RS, or RE) on the certificate. Churches are not exempt entities in South Dakota and owe sales tax on their purchases.¹⁴

Records You Have to Keep

Hold on to receipts, sales records, invoices, and exemption certificates for at least three years. The Department of Revenue can inspect these during business hours, and destroying them earlier without written authorization from the Secretary of Revenue is a violation.¹⁵ If an auditor arrives and records are missing or incomplete, the burden shifts to you to prove the tax was calculated correctly.

What Happens If You File Late

A missed deadline brings a penalty of 10% of the tax owed, with a $10 minimum that applies even when no tax was due. Interest runs at 1% per month on unpaid balances, with a $5 first-month minimum. If the Department determines the delay was intentional, interest climbs to 1.5% per month.¹⁶

Filing a false return to evade the tax is a Class 6 felony. Failing to pay within 60 days of the due date is a Class 1 misdemeanor, as is refusing to let the Department inspect your records.¹⁷ Payments on a delinquent account are applied first to the oldest tax balance, then to interest, then to penalties, so a partial payment will not stop interest from continuing to accrue on whatever tax remains.¹⁸

1
South Dakota Legislature. South Dakota Code 10-45 – Retail Sales and Service Tax
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South Dakota Department of Revenue. Tourism Tax
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South Dakota Legislature. South Dakota Code 10-45-2 – Tax on Sale of Tangible Property
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South Dakota Department of Revenue. Municipal Tax
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South Dakota Legislature. South Dakota Code 10-52A – Municipal Gross Receipts Tax
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South Dakota Legislature. South Dakota Code 10-45-7 – Tax on Room or Parking Site Rentals to Transient Guests
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South Dakota Legislature. South Dakota Code 10-52A-2
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South Dakota Department of Revenue. Sales and Use Tax
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South Dakota Department of Revenue. Tax License Applications
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South Dakota Department of Revenue. Tourism Tax Laws and Regulations
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South Dakota Legislature. South Dakota Code 10-52A-4.2
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South Dakota Department of Revenue. Lodging – Government Exemptions
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South Dakota Department of Revenue. South Dakota Department of Revenue – Tribal
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South Dakota Department of Revenue. Exempt Entities
15
South Dakota Legislature. South Dakota Code 10-52A-9
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South Dakota Legislature. South Dakota Code 10-59-6 – Penalty for Failure to File Return
17
South Dakota Legislature. South Dakota Code 10-52A-8
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South Dakota Department of Revenue. Sales and Use Tax Laws and Regulations