Catching Up in Sioux Falls
Late filings in Sioux Falls rarely involve only one agency. A restaurant that fell behind may owe state sales tax, Sioux Falls municipal and gross receipts tax, and federal payroll and income tax returns. A hotel may also be behind on the city's business improvement district tax, which is paid to the city rather than the state. A commuter may have skipped Minnesota or Iowa returns for years. BOMCAS helps Sioux Falls individuals and businesses sort out what is missing, rebuild the records and prepare the late returns, so they can get current and stay current.
The general catch-up process and South Dakota's penalty rules are on our South Dakota back taxes and late filing page. The Sioux Falls details follow.
What We Do, and What We Do Not Do
We reconstruct income and sales, prepare late federal, South Dakota, Minnesota and Iowa returns, calculate the balances, and draft written responses to notices for you to sign. One limit is important: BOMCAS is not your representative before the IRS. Audits, appeals and collection negotiations handled under a power of attorney need someone authorized to practise before the IRS, such as an attorney or an enrolled agent. When that is needed, we supply that person with the rebuilt records and completed returns and keep working on the bookkeeping side.
Sioux Falls Sales Tax Returns
Every city tax is reported on the state sales tax return under its own code: 330-2 for the 2 percent Sioux Falls municipal tax, 330-1 for the 1 percent gross receipts tax on food, alcohol, lodging and admissions, and 800-1 for the Sioux Falls lodging tax. When a Sioux Falls business stops filing, all of these go unpaid together. For each late period, the state adds a penalty of 10 percent of the tax (never less than $10) once the return is more than 30 days overdue, and charges 1 percent interest for every month the tax stays unpaid. If returns stay unfiled, the Department of Revenue can estimate the tax, file liens with the county register of deeds, revoke the sales tax license and file criminal charges. It can also pursue officers, managers and partners of entities. Catching up means rebuilding sales by code for each missing period, not just total sales.
Hotels and the Business Improvement District Tax
Hotels and motels with 40 or more rooms in Sioux Falls charge guests a $2-per-night occupational tax for the Experience Sioux Falls business improvement district. It is remitted to the city's finance director by the 20th of each month. The city code allows the finance director to audit hotel records, including daily occupancy reports, and to seek an injunction against an establishment that does not remit. A hotel that is behind on state lodging taxes is often behind on this one too. We rebuild nightly room counts from the property management system, calculate both the state and city amounts, and prepare the filings for each.
Vendors Who Never Registered
Food trucks, event vendors, home-based sellers and service providers sometimes start working in Sioux Falls without a South Dakota sales tax license. The city's mobile food vendor licence requires a sales tax number, so some vendors only find out when they apply. A business that has never registered, has not collected tax and has not been contacted for an audit may qualify for the Department of Revenue's voluntary disclosure program. The program can waive penalties, rules out criminal prosecution and allows 60 days to work out the liability. We review whether you qualify before anything is sent to the department.
Unfiled Federal Returns
When the IRS asks a non-filer to catch up, its usual focus is the most recent six years. Each month a return is late adds 5 percent of the unpaid tax as a filing penalty, capped at 25 percent, with a separate late-payment penalty and interest on top. Many Sioux Falls clients first hear about it through a CP59 letter, which says the IRS expected a return it never received. If the IRS prepares a substitute return from wage and income reports, it will not include deductions you could claim. Filing a correct return, even if you cannot pay in full, stops the filing penalty from growing, and the IRS offers payment plans.
Missed Minnesota and Iowa Returns
Sioux Falls residents who worked in Minnesota or Iowa, and Minnesota or Iowa residents who worked in Sioux Falls without withholding, often have unfiled state returns. Minnesota and Iowa both tax their residents on all their income, including Sioux Falls wages. Each state has its own penalties and interest. We prepare the missing returns with the federal returns for the same years, so the figures agree.
Rebuilding the Records
We request IRS wage and income transcripts, rebuild business income and expenses from bank and card statements, pull sales reports by period from point-of-sale or booking systems, and reconstruct payroll from bank records where payroll reports are missing. Each period is documented so the return can be supported.
Staying Current
After the back returns are filed, we set up monthly bookkeeping coded for the Sioux Falls taxes, and a filing calendar covering the state return, the city business improvement district tax, payroll and estimates.
Sioux Falls Back Taxes and Late Filing Questions
I own a Sioux Falls restaurant and stopped filing sales tax. What do I owe?
Each missed period includes 4.2 percent state tax, the 2 percent Sioux Falls municipal tax and the 1 percent gross receipts tax, plus a 10 percent penalty (minimum $10) per late return and 1 percent monthly interest. We rebuild the sales and prepare each return.
Who collects the Sioux Falls hotel BID tax if I'm behind?
The city. Hotels with 40 or more rooms remit the $2-per-night business improvement district tax to the city's finance director, who can audit occupancy records and seek an injunction for non-payment.
Does BOMCAS represent me before the IRS?
No. Our role is the returns, the rebuilt records and draft letters you sign yourself. If you need someone to speak for you, hire an attorney or enrolled agent, and we will give them everything we have prepared.
I lived in Minnesota and worked in Sioux Falls without Minnesota withholding. What now?
Minnesota taxes residents on all income, so you likely owe Minnesota returns for those years. We prepare them with your federal returns and calculate the balance due.
Talk to BOMCAS About Back Taxes and Late Filing in Sioux Falls
After the catch-up, ongoing bookkeeping and, for employers, payroll keep things from slipping again. Future years run through business tax preparation and personal tax preparation, our sales and use tax service handles the returns that most often fall behind in Sioux Falls, and tax planning keeps the next year on track. Anyone with unfiled returns in both Canada and the United States should read cross-border tax. The statewide rules behind the rest of our work are explained on our South Dakota pages for business tax preparation, personal tax preparation, sales and use tax, bookkeeping, payroll, tax planning and cross-border tax, and the South Dakota overview brings them together.
Send us a short note about your Sioux Falls situation and we will come back with next steps. Reach us through the BOMCAS contact page or the form below, call 780-667-5250 or email info@bomcas.ca. You can also return to the Sioux Falls overview. Nothing on this page is advice for your specific circumstances.