Taxes in the Hub City
Aberdeen is the trading centre for northeastern South Dakota and a good share of south-central North Dakota. The Census Bureau put the city's population at about 28,000 in 2025, and Brown County, which contains all of it, at about 37,600. Farmers come here for grain marketing, agronomy, machinery and banking; patients come for two regional hospitals; and the city has a strong base of factories. South Dakota does not tax personal or corporate income, but Aberdeen businesses still deal with city sales taxes, two kinds of improvement district tax and, for many, customers and crews in North Dakota. BOMCAS works with Aberdeen businesses and households remotely, and our Aberdeen pages are built around those local details.
Statewide rules that apply from Aberdeen to the Black Hills are explained in our South Dakota overview; this page concentrates on the Hub City and Brown County.
Farm Cooperatives, Factories and Hospitals
Agtegra Cooperative, owned by nearly 6,900 farmers and ranchers mainly in the two Dakotas, has its headquarters in Aberdeen and more than 70 locations. The Aberdeen Development Corporation lists 3M, Avera St. Luke's Hospital, Sanford Aberdeen Medical Center, Demkota Ranch Beef, Northern State University, the City of Aberdeen and Walmart among the largest establishments. 3M's Aberdeen plant makes respirators and filtration products. Manufacturers such as Hub City, which makes gear drives, Twin City Fan and Blower, Banner Engineering and Harris Machine add skilled industrial work. Northern State University enrolled about 3,890 students in fall 2026, according to the Board of Regents.
Aberdeen Rates and Local Taxes
- Aberdeen's 2 percent municipal sales tax joins the state's 4.2 percent, for 6.2 percent on most goods and taxable services.
- The 1 percent municipal gross receipts tax on lodging, alcohol, prepared food and admissions raises restaurant, bar and event sales to 7.2 percent.
- A hotel or motel room for less than 28 nights also carries the 1.5 percent state tourism tax, for 8.7 percent in total.
- Business Improvement District No. 2 adds $2 per night at hotels and motels with 25 or more rooms, funding visitor promotion through the city's convention and visitors bureau.
- Property in the downtown business improvement district pays a separate annual occupation tax of 4 cents per square foot of footprint, with exemptions for owner-occupied homes, nonprofits and government property.
- Brown County voters rejected a half-percent county sales tax on November 3, 2026, so no county tax is added in 2027. Under current law, the state rate still goes from 4.2 to 4.5 percent on July 1, 2027.
Seasons in Aberdeen
Much of Aberdeen's year follows the farm calendar: input sales and financing in spring, harvest and grain marketing in autumn, and year-end planning when crop prices and prepayments are known. Pheasant season, which opens in October, brings hunters who fill hotels, restaurants and outfitters. Northern State's academic year adds students, staff and athletics visitors from September through May. Payroll and cash flow move with all three.
Close to North Dakota
The North Dakota line is less than an hour north, and many Aberdeen businesses sell grain inputs, machinery, construction and services there. North Dakota taxes income, at rates from 0 to 2.5 percent, and has its own sales tax with a 5 percent state rate, though fewer services are taxable than in South Dakota. It also runs workers' compensation through a state agency. Our business tax, sales tax and payroll pages describe what that means for an Aberdeen company.
Licences in Aberdeen
Aberdeen licenses particular activities rather than every business. Transient merchants, peddlers and solicitors, alcoholic beverage sellers, sign hangers and residential building contractors need city licences, issued through the Finance Office or Community Development. Residential contractors, wherever they are based, normally pass a city exam and show liability insurance, workers' compensation where applicable and a South Dakota excise tax licence. Commercial contractors do not need a city licence but must hold the state excise tax licence, and plumbers and electricians are licensed by the state.
How BOMCAS Helps in Aberdeen
Many Aberdeen clients start with bookkeeping that follows the farm year, sales and excise tax returns and payroll for seasonal and North Dakota crews. After year end, we prepare business returns and owners' personal returns, then turn to planning for grain sales, equipment and farm succession. Overdue years go through catch-up filing, and Canadians who hunt, own land or work here can read about Canada–U.S. tax.
Anywhere in the state, the same South Dakota guides apply to business returns, personal returns, sales tax, bookkeeping, payroll, planning, back taxes and Canada–U.S. tax.
Aberdeen Questions
What is the sales tax rate in Aberdeen?
Most sales carry 6.2 percent, made up of 4.2 percent state tax and Aberdeen's 2 percent. Restaurants, bars, lodging and admissions add the 1 percent gross receipts tax, and a hotel stay is taxed at 8.7 percent plus $2 a night at hotels with 25 or more rooms.
Is there a Brown County sales tax?
No. Brown County voters rejected a proposed half-percent county tax at the November 3, 2026 election, so Aberdeen will not have a county sales tax in 2027.
Does Aberdeen require a business licence?
The city licenses specific activities, such as residential contracting, transient sales, alcohol and sign hanging. Most other businesses start with a South Dakota sales tax licence, but check with City Hall for your activity.
Do you help Aberdeen businesses with North Dakota customers?
Yes. We review North Dakota sales tax, payroll and income tax obligations for Aberdeen firms that sell, deliver or work there.
Talk to BOMCAS About Your Aberdeen Taxes
In the southeast corner of the state, our Sioux Falls pages cover South Dakota's largest city, its split between Minnehaha and Lincoln counties, its own lodging tax and a workforce that commutes in from Minnesota and Iowa.
On the other side of the state, our Rapid City pages deal with Black Hills tourism taxes, the hotel improvement district, Ellsworth Air Force Base and crews working across the Wyoming line.
In eastern South Dakota near the Minnesota line, our Brookings pages cover South Dakota State University, the city's manufacturing employers, its pillow tax for larger hotels and work across the nearby Minnesota line.
Between Lake Kampeska and Pelican Lake, our Watertown pages cover Terex and the city's other manufacturers, Lake Area Tech, lake cabin rentals, the hotel improvement district and jobs over the Minnesota border.
On the Missouri River across from Nebraska, our Yankton pages look at Avera Sacred Heart, the city's manufacturers, Mount Marty University, Lewis and Clark Lake businesses and the many households that live or work on the Nebraska side.
Tell us a little about your Aberdeen business or household and BOMCAS will reply with next steps and what we need to quote. Reach us through the contact page or the form below, by phone at 780-667-5250 or by email at info@bomcas.ca. You can also go back to the South Dakota overview to compare services. This page is general information and is not advice for your own situation.