Agriculture is a major contributor to the state’s GDP. South Dakota is one of the nation’s leading beef producers. Other key sectors include tourism, mining, and manufacturing.
Reasons for doing business in South Dakota
In addition to a favorable tax regime, South Dakota is known for having a regulatory environment that is less burdensome than in other states. CNBC gave South Dakota an A- in the category of “business friendliness” in its Top States for Business Report.
South Dakota also offers a number of financing options and tax incentives to assist new and existing companies. Two key programs are the Reinvestment Payment Program and the South Dakota Jobs Program.
What is the cost of doing business in South Dakota?
South Dakota has one of the lowest tax burdens in the nation. The state does not levy corporate income tax, personal income tax, personal property tax, business inventory tax, or inheritance or estate taxes. The state sales tax is 4.5%, and there may be an additional general tax applied at the local level.
How is South Dakota’s infrastructure?
Businesses in South Dakota have access to a robust network of highways and railroads and four ports of entry. But extreme weather, long distances between populated areas, and rapid growth in the larger cities do present some challenges to the state’s infrastructure. In addition, there is a need to improve broadband access in rural areas.
What are the challenges of doing business in South Dakota?
One of the main challenges is a tight labor market. Even though the state has been attracting out-of-state residents in recent years, there are not enough workers to fill all job openings.
Another potential issue is state laws concerning reproductive rights and gender care, which may make it difficult for companies to attract and retain talent.