The current-dollar gross state product of South Dakota was US$37 billion as of 2008, the fifth smallest total state output in the US. The per capita personal income was $37,375 in 2008, ranked 26th in the U.S. and 13.2% of the population is below the poverty line. As of November 2008, South Dakota's unemployment rate was 3.4%, the third lowest jobless rate in the nation.
The service industry is the largest economic contributor in South Dakota. This sector includes the retail, finance, and health care industries. Citibank, which was the largest bank holding company in the United States at one time, established national banking operations in South Dakota in 1981 to take advantage of favorable banking regulations. Government spending is another important segment of the state's economy, providing over ten percent of the gross state product. Ellsworth Air Force Base, near Rapid City, is the second-largest single employer in the state.
Agriculture has historically been a key component of the South Dakota economy. Although other industries have expanded rapidly in recent decades, agricultural production is still very important to the state's economy, especially in rural areas. The five most valuable agricultural products in South Dakota are cattle, corn (maize), soybeans, wheat, and hogs. Agriculture-related industries such as meat packing and ethanol production also have a considerable economic impact on the state. South Dakota is the sixth leading ethanol-producing state in the nation.
Another important sector in South Dakota's economy is tourism. Many travel to view the attractions of the state, particularly those in the Black Hills region, such as historic Deadwood, Mount Rushmore, and the nearby state and national parks. One of the largest tourist events in the state is the annual Sturgis Motorcycle Rally. The five day event drew over 450,000 attendants in 2006, significant considering the state has a population of only 790,000. In 2006, tourism provided an estimated 33,000 jobs in the state and contributed over two billion dollars to the economy of South Dakota.
State taxes
As of 2005, South Dakota has the lowest per capita total state tax rate in the United States. The state does not levy personal or corporate income taxes, inheritance taxes, or taxes on intangible personal property. The state sales tax rate is 4 percent. Various localities have local levies so that in some areas the rate is 6 percent. The state sales tax does not apply to sales to Indians on Indian Reservations, but many reservations have a compact with the state. Businesses on the reservation collect the tax and the state refunds to the Indian Tribes the percentage of sales tax collections relating to the ratio of Indian population to total population in the county or area affected. Ad valorem property taxes are local taxes and are a large source of funding for school systems, counties, municipalities and other local government units. The South Dakota Special Tax Division regulates some taxes including cigarette and alcohol related taxes.
The service industry is the largest economic contributor in South Dakota. This sector includes the retail, finance, and health care industries. Citibank, which was the largest bank holding company in the United States at one time, established national banking operations in South Dakota in 1981 to take advantage of favorable banking regulations. Government spending is another important segment of the state's economy, providing over ten percent of the gross state product. Ellsworth Air Force Base, near Rapid City, is the second-largest single employer in the state.
Agriculture has historically been a key component of the South Dakota economy. Although other industries have expanded rapidly in recent decades, agricultural production is still very important to the state's economy, especially in rural areas. The five most valuable agricultural products in South Dakota are cattle, corn (maize), soybeans, wheat, and hogs. Agriculture-related industries such as meat packing and ethanol production also have a considerable economic impact on the state. South Dakota is the sixth leading ethanol-producing state in the nation.
Another important sector in South Dakota's economy is tourism. Many travel to view the attractions of the state, particularly those in the Black Hills region, such as historic Deadwood, Mount Rushmore, and the nearby state and national parks. One of the largest tourist events in the state is the annual Sturgis Motorcycle Rally. The five day event drew over 450,000 attendants in 2006, significant considering the state has a population of only 790,000. In 2006, tourism provided an estimated 33,000 jobs in the state and contributed over two billion dollars to the economy of South Dakota.
State taxes
As of 2005, South Dakota has the lowest per capita total state tax rate in the United States. The state does not levy personal or corporate income taxes, inheritance taxes, or taxes on intangible personal property. The state sales tax rate is 4 percent. Various localities have local levies so that in some areas the rate is 6 percent. The state sales tax does not apply to sales to Indians on Indian Reservations, but many reservations have a compact with the state. Businesses on the reservation collect the tax and the state refunds to the Indian Tribes the percentage of sales tax collections relating to the ratio of Indian population to total population in the county or area affected. Ad valorem property taxes are local taxes and are a large source of funding for school systems, counties, municipalities and other local government units. The South Dakota Special Tax Division regulates some taxes including cigarette and alcohol related taxes.
