Credit card processing and merchant services in Sioux Falls, SD
Sioux Falls adds a 2% municipal sales tax to South Dakota's 4.2%, and its 1% municipal gross receipts tax adds another point on meals, alcoholic drinks, lodging and admissions.
Sioux Falls has two city taxes, and which ones you charge depends on what you sell. The South Dakota Department of Revenue's municipal rate chart lists a 2% municipal sales tax and a 1% municipal gross receipts tax for the city. Most taxable sales carry 6.2%: the 4.2% state rate plus the city's 2%.
The gross receipts tax is narrower. According to the Department of Revenue, a city can levy it on alcoholic beverages, eating establishments, lodging accommodations, and admissions to places of amusement and to athletic and cultural events. So a Sioux Falls restaurant or bar generally charges 7.2% on its food and drink, while a clothing store stays at 6.2%. Hotels and venues owe the extra 1% on rooms and admissions too, but check with the department for any other taxes on those sales before you settle on a total.
If you sell in both camps, meals and retail merchandise for example, set them up as separate tax categories on your POS terminals and confirm which items carry the extra 1%. The department says every business licensed in South Dakota must collect and remit both the municipal sales or use tax and the municipal gross receipts tax, so a wrong category is yours to fix.
As of July 1, 2025, the Census Bureau estimates Sioux Falls' population at 213,748.
South Dakota has no surcharge statute. The state's consumer protection page still describes surcharges of up to 4% under the 2013 settlement terms, but Visa's cap today is 3%, so plan around 3% if you take Visa. The South Dakota page explains the gap and links the sources.
We price Sioux Falls accounts on interchange-plus, month to month, and every account has a dedicated rep. Restaurants can start with our restaurant payment processing guide, and any business can start with a free statement review.
Rules that matter in Sioux Falls
Municipal gross receipts tax
The Department of Revenue's municipal rate chart lists a 1% municipal gross receipts tax for Sioux Falls, in addition to the 2% municipal sales tax. South Dakota municipalities can impose the gross receipts tax on alcoholic beverages, eating establishments, lodging accommodations, and admissions to places of amusement and to athletic and cultural events.
Every business licensed in South Dakota must collect and remit the municipal sales or use tax and the municipal gross receipts tax that apply to its sales.
Sources: South Dakota Department of Revenue, Municipal and special jurisdiction tax rate chart (July 2025, PDF); South Dakota Department of Revenue, Municipal tax
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Common questions
What is the sales tax rate in Sioux Falls?
6.2% on most taxable sales: South Dakota's 4.2% state rate plus the city's 2% municipal sales tax. Restaurant meals, alcoholic drinks and other sales that fall under the city's 1% municipal gross receipts tax carry another point on top.
Which Sioux Falls businesses owe the municipal gross receipts tax?
Businesses selling alcoholic beverages, restaurants and other eating establishments, lodging, and admissions to places of amusement and to athletic and cultural events. The Department of Revenue's rate chart lists the Sioux Falls rate at 1%. Retail sales outside those categories carry the 2% municipal sales tax only.
What should a Sioux Falls restaurant check before adding a card surcharge?
That it applies to credit cards only, never debit or prepaid; that it stays at or under your cost and Visa's 3% cap (4% for Mastercard), even though the state's consumer guidance still mentions 4%; and that it's disclosed before the sale and printed on the receipt. Our surcharging program handles that setup.
How can Sioux Falls hotels and venues take deposits and ticket payments?
Use online payments for web bookings and ticket sales, and the virtual terminal for deposits taken by phone, emailed invoices and payment links. The payment channel doesn't change what's taxable, so set the gross receipts tax up on every channel you use.
Disclaimer: general information, not professional advice
This page is general educational information, not legal, tax, accounting or financial advice. Rules and rates vary by place and change, so confirm them with the official source and a qualified professional before you act. Full terms are in our Terms of Service.
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