Taxes, Incentives & Financing

The South Dakota entrepreneur has a competitive edge over his/her business counterparts in 49 of the 50 United States. Per capita state taxes are the 49th lowest in the country here. The South Dakota business person pays:

No Corporate Income Tax
No Personal Income Tax
No Personal Property Tax
No Business Inventory Tax
No Inheritance Tax
Lowest State Per Capita Taxation

Taxes

Local Sales Tax Rate:	2%
State Sales Tax Rate:	4%
Agricultural Property Tax	$18.972 per $1,000
Residential (Owner Occupied) Property Tax	$20.583 per $1,000
Non-Agricultural Property Tax	$25.643 per $1,000
*property taxes change every year per Lake County Auditor's office

Unemployment Insurance

The average unemployment insurance rate for experienced employers is 1.39 percent. The wage base is $9,500. For new employers the rate is 1.75 percent for the first year's operation and 1.55 percent for the second and third years if the company's account balance is positive. Thereafter, the rate is based on the company's experience.

Workers Compensation

In South Dakota, employers can insure workers by the type of work done, not the overall company code, a procedure that often results in greater savings. Also, South Dakota workers compensation is not charged against vacation, sick or holiday pay which can save you approximately 10 percent on workers compensation costs. Manufacturers in South Dakota pay an average workers compensation rate of $2.91 per $100 payroll, the 9th lowest rate in the nation.

In South Dakota, insurers are permitted to apply up to a 25% credit on a company's final workers compensation premium if the company qualifies aftera safety or loss control inspection, and if the company agrees to the safety recommendations for the insurer.

Financing/Incentives

We work with the South Dakota Governor's Office of Economic Development (GOED) and the City of Madison to offer a variety of incentives for existing, expanding and new businesses.

Programs offered through the GOED

Workforce Training Opportunities

The National Career Readiness Certificate program is offered by the Madison Area Career Learning Center (SD Department of Labor) and offers an opportunity for businesses to higher qualified employees. The NCRC is a portable, national credential that verifies to employers anywhere in the United States that an individual has essential core employability skills in Reading, Math and Locating Information. A full description of the program can be found at: SD Department of Labor.

NCRC is used for:

Screening – Employers interview only applicants who have the skills required for the job.
Hiring and promotion – A NCRC can be used as a "plus" factor to help make selection and promotion decisions.
Targeting employee training and development – Employers can target their training budgets for job-specific skills rather than basic skills.

Low Interest Loans

Madison Revolving Loan Program
The mission of this program is to provide low interest loans to create quality, primary jobs in Madison. Contact the LAIC for more info!

LAIC Intermediary Relending Program
This program allows local businesses to work in partnership with the LAIC and a local bank to obtain a low interest business loan. There is a minimum loan amount, involvement with a bank and application with approval is required. Started in 2009, the program has been a success for new and expanding businesses. Contact the LAIC for more info!

South Dakota REDI Loan Program
The REDI (Revolving Economic Development Initiative) loan program's mission is to provide low interest loans to create quality, primary jobs in South Dakota. Click here for more info.

SBA 504
The SBA 504 loan program is another attractive financing tool. This program offers subordinated, fixed rate financing to healthy and expanding small businesses. Click here for more info.

APEX
The APEX (Agricultural Processing and Export) Loan Program is designed to assist companies in communities with a population of 25,000 or less or which add value to raw agricultural products through processing. The program is open to for-profit businesses and local economic development corporations. Click here for more info.

MicroLOAN
The MicroLOAN South Dakota Loan Program is a partnership with CitiBank (South Dakota) N.A., South Dakota Development Corporation, and Governor's Office of Economic Development. These loans are made available to small businesses within the borders of South Dakota and South Dakota residents, including main street and retail operations, for working capital, equipment, real estate or other fixed asset project costs. Click here for more info.

First District Development Company Loan Programs
The mission of the FDDC is to assist businesses by providing long term, lower rate financing for their growth and development, while improving the overall economic condition of the area. There are several loan programs available, for more information contact - www.1stdistrict.org/FDDC.

Rural Electric Economic Development, Inc. (REED) Fund
The program provides financing for business and community projects that create and retain jobs and build community infrastructure. Contact Sioux Valley Energy at (605) 256-1600 for more information.

South Dakota Community Capital Fund
The South Dakota Community Capital Fund (SDCCF) offers economic development organizations serving greater South Dakota the opportunity to participate in an innovative new development financing resource. Click here for more info.

Bond Financing

Another financing option is the pooled loan program through South Dakota's Economic Development Finance Authority. This loan program, designed for more capital intensive projects, provides small businesses access to larger capital markets for tax-exempt or taxable bond issuances. The program can fund projects individually or pool them to help lower the cost of the bond issuance. One of the biggest advantages of this program is a long-term loan with a fixed interest rate. Click here for more info.

Value-Added Agriculture Subfund

Technology is changing the agricultural industry. What hasn't changed is South Dakota's commitment to keeping agriculture one of it's leading industries. Click here for more info.

Venture Capital

The purpose of the Venture Capital Investment Fund is to make low interest funds available to eligible, for-profit venture capital investment companies (the "Company") in order for the Company to make an investment in an eligible business. Click here for more info.

Tax Refunds
South Dakota offers tax refunds on sales, use and contractors' excise taxes. Click here for more info.

More Financing Opportunities

South Dakota Resource Directory
The South Dakota Resources Directory provides summary information on a wide range of technical and financial resources related to business, community and economic development. Resources are listed by the type of organization (i.e. state agencies, federal agencies, etc) and by agency name. A fold out matrix with resources and programs listed alphabetically is located at the back of this directory. Click here for more info.