A University Town on the Bluffs
Vermillion sits on the bluffs above the Missouri River bottoms in Clay County, in the far southeast corner of South Dakota. It is home to the University of South Dakota, the state's flagship university and its law and medical schools, and the university shapes almost everything about the local economy. The Census Bureau estimated about 11,700 residents in the city and 15,000 in Clay County in 2025, and USD reported fall 2026 enrollment of 10,040, down from 10,405 the year before. Faculty, staff, graduate assistants, students and the landlords and businesses that serve them make up much of BOMCAS's work here, which we handle remotely.
For the rules that apply in every South Dakota community, start with our South Dakota overview; this page is about Vermillion and Clay County.
Beyond the Campus
Vermillion also has industry. Masaba builds mining and aggregate equipment and employs more than 200 people, Polaris has run a distribution centre in the city for 25 years with more than 170 employees, and Sanford Vermillion Medical Center employs about 250. Main Street has restaurants, bars and shops, the campus holds the National Music Museum, and DakotaDome and the Sanford Coyote Sports Center bring crowds for Coyote games. Around the city, Clay County farms corn and soybeans on the river bottoms and uplands.
Sales Tax and the County Vote
- Vermillion levies a 2 percent municipal sales tax (code 362-2), so most purchases are taxed at 6.2 percent.
- Restaurant meals, alcohol, lodging and admissions to events add the city's 1 percent gross receipts tax (code 362-1), for 7.2 percent, and short lodging stays add the 1.5 percent tourism tax as well.
- Hotels in Vermillion's Business Improvement District No. 1, established in 2013, charge $2 per occupied room night.
- Clay County commissioners voted 3–2 to adopt the new half-percent county tax, but residents petitioned to refer the decision. A special election is set for November 17, 2026. If voters approve it, the county tax would begin on July 1, 2027.
- The state rate is scheduled to rise from 4.2 to 4.5 percent on July 1, 2027. If the county tax passes, Vermillion's general rate would then be 7.0 percent; if it fails, 6.5 percent.
We will update these pages after the vote. Businesses quoting prices or signing contracts that run past mid-2027 should allow for either outcome until then.
Nebraska Next Door
The Newcastle bridge links Clay County with Dixon County, Nebraska, and some USD employees and Vermillion workers commute from across the river. Nebraska taxes its residents on all of their income, including wages earned in Vermillion, so a Nebraska resident working at the university or a local employer still files a Nebraska return even though South Dakota has no income tax.
Who We Work With
Our Vermillion clients include faculty with consulting, book or grant income; graduate students and international scholars; landlords renting houses and apartments to students; Main Street restaurants and bars; contractors; and farm families in Clay County.
How BOMCAS Helps in Vermillion
Vermillion clients usually begin with bookkeeping that follows the school year, sales and gross receipts tax filings and payroll for student and tipped staff. Each year we prepare business returns and personal returns for faculty, landlords and families, and use them for planning around retirement, rentals and farms. Anyone with unfiled years can start with back taxes and late filing, and international students and scholars can read about cross-border tax.
For the rest of the state, see our South Dakota pages on business taxes, personal taxes, sales and use tax, bookkeeping, payroll, planning, back taxes and cross-border tax.
Vermillion Questions
What is the sales tax rate in Vermillion?
6.2 percent on most purchases, plus 1 percent more on meals, alcohol, lodging and admissions. The state rate is scheduled to rise on July 1, 2027.
Will Clay County add a sales tax?
Voters decide on November 17, 2026. If approved, a half-percent county tax would begin July 1, 2027.
I live in Nebraska and work at USD. Do I file anywhere?
Nebraska taxes residents on all their income, so you file a Nebraska return. South Dakota has no income tax.
Do you work with international students and scholars?
Yes. We prepare nonresident returns and the forms students and scholars need.
Talk to BOMCAS About Your Vermillion 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.
In the northeast, our Aberdeen pages deal with farm cooperatives and equipment dealers, 3M and other plants, two hospitals, Northern State University, the city's hotel and downtown district taxes and jobs across the North Dakota 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.
Along Interstate 90 in the James River valley, our Mitchell pages cover the Corn Palace and its visitors, trailer and component manufacturers, Avera Queen of Peace, two colleges and the hotel district charge.
On the James River in the centre of the eastern half of the state, our Huron pages cover the State Fair, Dakota Provisions and its growers, Hutterite colony accounts, Huron's Karen and other new American families and the city's hotel room tax.
At the mouth of Spearfish Canyon in the northern Black Hills, our Spearfish pages deal with Black Hills State, newcomers and retirees, vacation rentals, the Lawrence County tax that starts in 2027 and work over the Wyoming line.
In the state capital on the Missouri River, our Pierre pages cover public employees and retirees, statewide associations and nonprofits, Lake Oahe outfitters, two hotel districts and the Hughes County tax that begins in July 2027.
Beside Ellsworth Air Force Base east of Rapid City, our Box Elder pages focus on military households and veterans, base subcontractors and homebuilders, new businesses and a city split between Pennington and Meade counties.
East of the Big Sioux on I-90, our Brandon pages speak to young families, home-based businesses, trades and homebuilders, new storefronts at the interchange and a Minnehaha County rate that stays put in 2027.
On the Lincoln County edge of the metro, our Harrisburg pages cover subdivision developers and homebuilders, landowners selling to developers, new households and Lincoln County's sales tax that begins in January 2027.
Below Bear Butte, our Sturgis pages deal with rally businesses and temporary vendors, rally-week home rentals, VA staff and veterans at Fort Meade, and the Meade County tax that starts in January 2027.
Just off I-29 in Lincoln County, our Tea pages cover manufacturers and distributors, mechanical and electrical contractors, interstate franchises, young families and the county sales tax that begins in January 2027.
Between Lake Madison and Lake Herman, our Madison pages cover Dakota State University faculty and students, technology consultants, the Manitou plant and its suppliers, lake cabin rentals and Lake County farms.
Where the Redwater meets the Belle Fourche River, our Belle Fourche pages look at cattle and sheep ranches, irrigated hay ground, bentonite haulers and mills, jobs in Montana and a Butte County that has not added a sales tax.
Write to BOMCAS about your Vermillion business or household and we will reply with next steps and what we need for a quote. Use the contact page or the form below, call 780-667-5250 or email info@bomcas.ca. You can find every Vermillion service on the South Dakota overview. This page is general information, not advice for your situation.