Category: South Dakota

South Dakota Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.
We were recently asked about credits and incentives in South Dakota, and their state economic development professionals gave us some details (South Dakota incentives site click here).
For starters — South Dakota has no corporate income tax, no personal income tax, no personal property tax, and no business inventory tax — so income tax credits are not applicable!  CNBC ranked South Dakota #19 in their 2016 America’s Top States for Business survey (Georgia was #8 in the same survey). In that same survey, however, South Dakota is ranked #4 for Cost of Doing Business.
Financing and Other Incentives include:
Revolving Economic Development & Initiative (REDI) Fund, Economic Development Finance Authority (EDFA), South Dakota Microloan, South Dakota Works, Reinvestment Payment Program, and South Dakota Jobs Program.

R&D New Frontiers assists companies in offsetting R&D costs associated with gaining regulatory approval of products.  Also Proof of Concept Fund, Dakota Seeds (skilled employees), and Workforce Development Program, a matching grant program to spur technology-related training efforts.

Compared to Georgia, South Dakota has:
  • 0.0% corporate and 0.0% personal income tax rates!
  • Much lower combined state and local tax burden
  • A narrower range of incentives
  • Pre-approval required for all incentives
To summarize, South Dakota doesn’t need income tax incentives, because they don’t have income taxes.