South Dakota includes private school students in school districts’ average daily membership, calculating apportionment among districts of school fund income. Nonprofit entities registered in South Dakota exempt qualifying income from state and federal income taxes.
Property Taxes Overview
Property taxes are the primary funding source for municipalities, school systems, and counties. The federal income taxes apply; however, South Dakota has no state income tax. Motor vehicles are subject to a 4 percent vehicle excise tax.
Tax Exempt Entities
Certain entities are exempt from sales and use tax under state law. Relief organizations, religious institutions, and private schools may apply to the department for exempt status. Each exemption comes with a unique identification code, "RA" for relief agencies and "RS" for private schools.
Additional Exempt Categories
There are additional exempt categories including raw materials, medical devices, occasional sales, motor vehicles, and parts under maintenance contracts.
ASBSD Executive Director Perspective
The ASBSD Executive Director emphasized the importance of allowing exemptions for sparsely populated areas to recruit teachers, noting housing as a critical factor.
Nonprofit Tax Exemption Process
Nonprofits must apply with the state tax authority to become exempt from income and franchise taxes. Harbor Compliance offers assistance to nonprofits in achieving tax exemption in every state. By becoming tax-exempt, organizations can use the saved funds to further their mission. Harbor Compliance guarantees the preparation and submission of a complete application for approval.
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