Sales Tax for a University City
Brookings businesses sell to students, visiting families, conference guests, farm customers and manufacturers, and much of what they sell is taxable, including many services. The city adds its own taxes on top of the state rate, larger hotels add a nightly charge, and big weekends bring in temporary vendors who also need to collect. With Minnesota so close, many Brookings sellers deliver or work across the line, where a different tax system applies. BOMCAS helps Brookings businesses register, charge the right rate, file each period and fix past errors.
Registration, taxable services and remote-seller rules are explained for the whole state in our South Dakota sales tax guide. Brookings rates and event sales are covered below.
What a Sale in Brookings Carries
These rates come from the Department of Revenue's municipal tax guide.
- General sales and taxable services: 4.2 percent state plus 2 percent Brookings municipal sales tax, reported under code 045-2, for 6.2 percent.
- Meals, alcohol, lodging and admissions: the 1 percent municipal gross receipts tax, code 045-1, which the city budget calls the 3B or "bed, booze and board" tax, brings these to 7.2 percent.
- Hotel and motel stays under 28 days: the 1.5 percent state tourism tax is added, for 8.7 percent.
- Hotels with 25 or more rooms: a $2-per-night Business Improvement District tax, which the city calls the pillow tax and uses with the 3B revenue to fund economic development and marketing.
Brookings County did not adopt the new 0.5 percent county gross receipts tax that six other counties begin on January 1, 2027, so the Brookings rates stay the same that day. Under current law, the state rate returns to 4.5 percent on July 1, 2027, which would raise each rate above by 0.3 points.
Services Are Taxable Too
South Dakota taxes most services unless a specific exemption applies. In Brookings that catches many businesses that do not think of themselves as retailers: computer repair and software services, photography, cleaning, lawn care, pet grooming and many repair shops. Services such as health care, education and most agricultural services are exempt. A firm that provides services in Brookings charges the 6.2 percent combined rate unless an exemption applies.
Game Days, Hobo Day and the Arts Festival
Jackrabbit home football games, Hobo Day weekend and events at the Dacotah Bank Center bring thousands of visitors, and the Brookings Summer Arts Festival brings artists and food vendors from many states each July. The city requires separate licences for Arts Festival vendors, food trucks and temporary vendors. Separately, anyone selling taxable goods or food needs a South Dakota sales tax licence and must collect the Brookings rates. Ticketed events carry the 1 percent gross receipts tax on admissions. We help regular vendors register once and file for each event period rather than collecting nothing and owing it later.
Farm Sales and Exemptions
Many Brookings dealers sell to farmers, and agricultural sales have their own rules. Farm machinery and attachment units used exclusively for agriculture carry the 4.5 percent farm machinery excise tax rather than sales tax, and certain agricultural inputs, such as seed, fertiliser and livestock feed, are exempt. Each exempt sale should be backed by the right exemption certificate kept on file, which is where many audit findings begin.
Sales Into Minnesota
Minnesota's general sales tax rate is 6.875 percent, plus local taxes in many cities and counties. A Brookings business without a place of business in Minnesota must register there once its retail sales shipped into Minnesota over the prior 12 months exceed $100,000 or reach 200 transactions. Physical presence counts too: delivering in your own trucks, keeping inventory in Minnesota, providing taxable services there, or conducting business in Minnesota on at least four days in a 12-month period can each require registration. Contractors working on Minnesota real property generally pay Minnesota sales or use tax on their materials. Minnesota also charges a retail delivery fee on certain deliveries of $100 or more by retailers above a sales threshold.
Use Tax
When a Brookings business buys equipment, software or supplies from a seller that does not charge South Dakota tax, it owes use tax at the combined Brookings rate on items used in the city. This often comes up for lab equipment, manufacturing parts and online purchases. If Minnesota tax was paid on something later brought into Brookings, South Dakota generally gives credit for it.
Filing
South Dakota sets each business's filing frequency, and returns are filed online. We keep sales broken out by tax code and location, maintain exemption certificates, reconcile every return to the books, and keep the pillow tax and any Minnesota returns on the same calendar.
Brookings Sales and Use Tax Questions
What is the Brookings hotel tax?
A hotel stay under 28 days carries 8.7 percent: the state's 4.2 percent, the city's 2 percent, the 1 percent 3B tax and the 1.5 percent tourism tax. Hotels with 25 or more rooms also add the $2-per-night pillow tax.
Does the 2027 county sales tax apply in Brookings?
No. Brookings County is not one of the six counties adopting the 0.5 percent county tax on January 1, 2027. The state rate change on July 1, 2027 does apply.
I sell food at the Summer Arts Festival. What do I need?
A city Arts Festival vendor licence and a South Dakota sales tax licence. Prepared food is taxed at 7.2 percent in Brookings, including the 1 percent gross receipts tax.
When must I collect Minnesota sales tax?
When you have a physical presence in Minnesota, such as your own deliveries, inventory or work there, or when your retail sales into Minnesota over the prior 12 months exceed $100,000 or reach 200 transactions.
Talk to BOMCAS About Sales and Use Tax in Brookings
Accurate returns start with bookkeeping that separates collected taxes, and the same sales figures support your federal business return. Businesses with missed periods can use our late-return service. Canadian suppliers should also consider cross-border treatment, while purchases timed around the 2027 state rate change belong in planning. We can also process employee pay and prepare owners' personal returns. Statewide context for other services is available in our South Dakota guides to business tax returns, individual returns, bookkeeping, payroll, tax planning, late filing and cross-border tax, plus the South Dakota overview.
Share a few details about your Brookings situation, and BOMCAS will reply with practical next steps and the information needed for a quote. Use the contact page or the form below, call 780-667-5250 or email info@bomcas.ca. To compare services, return to the Brookings overview. This information is general and does not replace advice for your specific facts.