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Tourism Tax

Gains In Metro Areas Drive SD Tourism Tax Upward Trend

Growth in South Dakota's three metropolitan areas is driving the state's tourism tax on an upward trend, while growth has been modest in the state's nine micropolitan areas and its non-metro areas, according to data from the South Dakota Department of Revenue.  

In 2015, the state's overall taxable tourism sales increased 5.4 percent over 2014, continuing a four-year upward trend after a 2010 spike was followed by a 2011 drop. Growth within the Rapid City, Sioux Falls and Sioux City metro areas accounted for 55 percent of the state's overall $736 million of tourism tax receipts in 2015, up from 54.6 percent in 2014 and 53 percent in 2013. (All figures are inflation-adjusted to 2015 dollars.)

In 2010, South Dakota's non-metro areas accounted for 17 percent of taxable tourism sales, but that share has since dropped to 13 percent. Micropolitan areas made up more than 25 percent of the state's taxable tourism sales in 2010 and have dipped to 19.6 percent in 2015. 

In 2015, taxable tourism sales in South Dakota hit a seven-year high of nearly $736 million, up from $732million in 2014. During the 2010 spike, taxable tourism sales climbed to nearly $673 million, up from 2009's $636 million. In 2011, taxable tourism sales dipped to $655.4 million and remained flat into 2012 before resuming growth in 2013, which hit $685 million.

The Black Hills region -- driven largely by the four key counties of Pennington, Lawrence, Meade and Custer -- accounted for nearly half of the state's taxable tourism sales in 2015. Pennington County (home to Rapid City and Mount Rushmore) maintained its commanding lead, accounting for 27.7 percent of the state's taxable tourism sales in 2015. 

No. 2 Minnehaha County (home to Sioux Falls) put up less than half of that at 14.1 percent. No. 3 was Lawrence County (home to Deadwood) at 8.7 percent, followed by No. 4 Meade County (home to Sturgis) at 5.8 percent and No. 5 Custer County at 3.7 percent. 

Lodging accounts for the vast majority of the state's taxable tourism sales, with that industry sector making up 56 percent of taxable tourism sales in 2015. This sector increased from 53.8 percent of taxable tourism sales in 2009 to 56.8 percent in the 2010 spike and has begun to decrease slightly.  

The No. 2 sector, shops and markets, accounted for 12.1 percent of taxable tourism sales in 2015, down from the six-year high of 14.8 percent recorded during the 2010 spike but not back down to 2009's 9.3 percent. No. 3 visitor attractions accounted for 9 percent of taxable tourism sales in 2014, continuing a steady slide since 2009 when it was 12 percent.

Recreational services and rentals accounted for 5.5 percent in 2015, down from a six-year high of 8.1 percent in 2011. Restaurants accounted for 3.3 percent in 2015, a seven-year high for that sector. Spectator events and "other visitor-related businesses" accounted for less than 1.0 percent, and 3.6 percent, respectively. 


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