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 recently updated data from the South Dakota Department of Revenue.
In 2014, the state's overall taxable tourism sales increased 6.8 percent over 2013, continuing a three-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 $11 million of tourism tax receipts in 2014, up from 53 percent in 2013 and 47 percent in 2012. (All figures are inflation-adjusted to 2014 dollars.)
In 2010, South Dakota's non-metro areas accounted for 17 percent of taxable tourism sales, but that share has since dropped to 10 percent. Micropolitan areas made up more than 25 percent of the state's taxable tourism sales in 2010 and have dipped to a bit more than 23 percent in 2014.
In 2014, taxable tourism sales in South Dakota hit a six-year high of nearly $732 million, up from $685 million in 2013. During the 2010 spike, taxable tourism sales climbed to more than $673 million, up from 2009's $636 million. In 2011, taxable tourism sales dipped to $655.6 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 2014. Pennington County (home to Rapid City and Mount Rushmore) maintained its commanding lead, accounting for more than 30 percent of the state's taxable tourism sales in 2014.
No. 2 Minnehaha County (home to Sioux Falls) put up less than half of that at 14.3 percent. No. 3 was Lawrence County (home to Deadwood) at 9.1 percent, followed by No. 4 Meade County (home to Sturgis) at 4.7 percent and No. 5 Custer County at 4 percent.
Lodging accounts for the vast majority of the state's taxable tourism sales, with that industry sector making up 58 percent of taxable tourism sales in 2014. This sector increased from 53.8 percent of taxable tourism sales in 2009 to 56.7 percent in the 2010 spike and has continued making small gains since.
The No. 2 sector, shops and markets, accounted for 11.6 percent of taxable tourism sales in 2014, 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 6.1 percent in 2014, down from a six-year high of 8.1 percent in 2011. Restaurants accounted for 2.7 percent in 2014, a six-year high for that sector. Spectator events and "other visitor-related businesses" accounted for less than 1 percent each.