Harrisburg Sales and Use Tax

Two Rate Changes in Six Months

Harrisburg businesses face two sales tax changes in 2027. On January 1, Lincoln County's new half-percent tax takes the city's general rate from 6.2 to 6.7 percent. On July 1, the state rate is scheduled to rise from 4.2 to 4.5 percent, taking it to 7.0 percent. Registers, invoices, online stores, contracts and price lists all need updating twice. BOMCAS prepares Harrisburg sales tax returns remotely and handles both changes.

General licensing and taxable services are covered in South Dakota sales and use tax, and Harrisburg's codes and its two rate changes in 2027 are set out here.

Harrisburg Rates

Through December 31, 2026: 6.2 percent general (code 151-2), 7.2 percent on meals, alcohol, lodging and admissions with the 1 percent gross receipts tax (code 151-1).
From January 1, 2027: 6.7 percent general and 7.7 percent on those items.
From July 1, 2027: 7.0 percent general and 8.0 percent on those items.
Lodging under 28 days also carries the 1.5 percent tourism tax.

Across the Metro, Rates Will Differ

Sioux Falls lies in both Minnehaha and Lincoln counties, and only Lincoln County has adopted the county tax. From January 2027, a delivery to a Sioux Falls address on the Lincoln County side will include the county tax, while one to the Minnehaha County side will not. Tea, Lennox, Canton, Worthing and rural Lincoln County addresses will also carry it, while Brandon, Hartford and Dell Rapids in Minnehaha County will not. A Harrisburg business delivering across the metro needs the correct rate for each address.

Contractors and Builders

Harrisburg's construction boom makes the contractor's excise tax central. Contractors pay 2 percent on gross receipts from realty improvements and sales or use tax on materials at the rate where they are delivered or used. Materials delivered to Harrisburg job sites after January 1, 2027 will carry the county tax. Builders and developers with projects spanning both rate changes should budget for the higher rates and review contract language on who bears the increase.

Developers and Utilities

Developers installing streets, water and sewer in new subdivisions are contractors for excise tax purposes on that work. Where the city later takes over the infrastructure, the developer generally still owes tax on the materials used. Purchases of land are not subject to sales tax.

Restaurants and New Retail

New restaurants pay the city's 1 percent gross receipts tax on food and drink in addition to state, city and, from 2027, county tax. Retailers opening in new buildings should have their point-of-sale systems updated before each change date rather than after.

Services

Many services are taxable in South Dakota, including lawn care, landscaping, snow removal, cleaning and repairs. Service businesses based in Harrisburg collect tax at the customer's location.

Use Tax

Equipment, materials and supplies bought online or out of state without South Dakota tax owe use tax at the rate where used, including the county tax from 2027.

Filing

We prepare returns, reconcile them to sales and job records, report sales by location and confirm rates after each change.

Contracts That Span the Changes

For a retail sale, the rate generally depends on when the sale is made and delivered. For construction contracts, the excise tax is based on receipts, while the tax on materials depends on when and where they are delivered. Contractors signing fixed-price agreements in late 2026 for work completed in 2027 should account for both increases in their pricing, or include a clause that passes changes in tax through to the customer.

Exemption Certificates

Sales to the Harrisburg School District, churches, nonprofits with exempt status and resellers require a valid exemption certificate. Keep certificates on file and renew them as required.