South Dakota is known for its business-friendly environment, low tax rates, and efficient regulatory structure.  The state offers a variety of incentives aimed at attracting businesses and supporting economic development, particularly in manufacturing, agriculture, and technology.  Below are some of the key incentives available for businesses operating in South Dakota.

South Dakota Economic Development Finance Authority (EDFA) Financing

Overview

The South Dakota EDFA financing program provides low-interest financing for projects that contribute to economic development in the state.  The program is aimed at helping businesses secure capital for expansion or relocation in South Dakota.

Eligibility

• The business must be investing in a new or expanded facility in South Dakota.

• The project must contribute to job creation or retention in the state.

Incentive Value

• Low-interest loans and bonds are available for qualifying projects, with financing terms based on the project size and the number of jobs created.

• Businesses can access up to $10 million in financing for eligible projects.

Application Process

Businesses must apply to the South Dakota Economic Development Finance Authority, submitting project proposals, financial projections, and job creation plans.

South Dakota Revolving Economic Development and Initiative (REDI) Fund

Overview

The REDI Fund offers low-interest loans and grants to businesses in South Dakota that are undertaking economic development projects.  The fund supports a wide range of industries, including manufacturing, agriculture, and technology.

Eligibility

• The business must be located in South Dakota or plan to relocate to the state.

• The business must create or retain jobs in South Dakota and demonstrate long-term viability.

Incentive Value

• Loans can be issued up to $1 million, with repayment terms typically ranging from 5 to 10 years.

• Grants are available for specific projects, with a maximum grant of $500,000.

Application Process

Businesses must apply through the South Dakota Governor’s Office of Economic Development (GOED), submitting a detailed business plan, financials, and job creation projections.

South Dakota Corporate Income Tax Exemption for New or Expanding Businesses

Overview

South Dakota offers an income tax exemption for new or expanding businesses that create new jobs in the state.  This program is designed to encourage investment in industries that are vital to South Dakota’s economy.

Eligibility

• The business must be a new or expanding enterprise in South Dakota.

• The business must create a minimum number of jobs and meet wage thresholds.

• The business must invest in property, equipment, or infrastructure in the state.

Incentive Value

• Eligible businesses can receive a corporate income tax exemption for up to 5 years.

• The exemption applies to business income generated from new operations or job creation within South Dakota.

Application Process

Businesses must apply to the South Dakota Department of Revenue (DOR), providing investment and job creation documentation.

South Dakota Sales and Use Tax Exemption for Manufacturing Equipment

Overview

South Dakota provides a sales and use tax exemption on machinery, equipment, and other tangible property used directly in the manufacturing process.  This program is designed to encourage investment in manufacturing infrastructure in the state.

Eligibility

• The business must be engaged in manufacturing operations within South Dakota.

• The business must use the machinery and equipment in direct manufacturing processes.

Incentive Value

• Businesses can receive an exemption from sales and use tax on eligible equipment purchases.

• The exemption covers up to 100% of the sales tax for qualifying machinery and equipment.

Application Process

Businesses must apply for the exemption through DOR, providing detailed documentation of the equipment and its use in manufacturing operations.

South Dakota Job Training Program

Overview

The South Dakota Job Training Program offers funding to businesses that invest in employee training for new and existing workers.  This program helps businesses develop the skills needed to meet the demands of the modern workforce.

Eligibility

• The business must be investing in training programs for employees who are newly hired or existing workers being trained for new roles.

• The business must be located in South Dakota and create or retain jobs.

Incentive Value

• The program provides up to $2,000 per employee trained, with funding amounts depending on the size of the business and the scope of the training program.

Application Process

Businesses must apply to the South Dakota Department of Labor and Regulation, submitting a training plan, employee lists, and training costs.

South Dakota Property Tax Exemption for New or Expanding Business Property

Overview

South Dakota offers property tax exemptions for new or expanding business properties that create jobs and invest in infrastructure.  This incentive is aimed at businesses that are growing their operations in the state.

Eligibility

• The business must invest in new property, including buildings and machinery, for its operations.

• The business must create new jobs or make substantial investments in infrastructure.

Incentive Value

• Businesses can receive up to a 10-year property tax exemption on qualified property.

• The exemption applies to both real and personal property used in business operations.

Application Process

Businesses must apply through DOR, providing project details, investment amounts, and job creation projections.

South Dakota Agri-Business Tax Credit

Overview

The South Dakota Agri-Business Tax Credit is designed to promote growth in the agriculture sector by providing tax incentives to agribusinesses investing in new facilities, equipment, and operations.

Eligibility

• The business must be in the agribusiness sector, including farming, processing, and other agricultural operations.

• The business must invest in new facilities or equipment that improve efficiency and expand operations.

Incentive Value

• The credit is worth up to 10% of the investment in qualifying equipment and facilities.

• The credit can be used against South Dakota corporate income taxes.

Application Process

Businesses must apply through the South Dakota Department of Agriculture, providing documentation of the investment and expected benefits.

South Dakota Small Business Development Center (SBDC) Services

Overview

The South Dakota SBDC offers a variety of services to support the growth and success of small businesses in the state.  These services include business counseling, financial analysis, and marketing assistance.

Eligibility

• The business must be a small business, typically defined as having fewer than 500 employees.

• The business must be located in South Dakota.

Incentive Value

• The SBDC provides free business counseling services, as well as access to a network of resources, including state and federal grant opportunities.

• Additional consulting services may be available at a reduced cost.

Application Process

Businesses must contact the South Dakota SBDC to schedule a consultation and receive customized assistance based on their specific needs.