Overview: Are Short-Term Rentals Allowed in Sioux Falls?

Yes, short-term rentals are explicitly allowed in Sioux Falls, South Dakota. The City of Sioux Falls permits short-term rental operations as of January 1, 2024, provided property owners obtain the required residential rental permit and comply with all applicable regulations. Short-term rentals are defined as dwellings rented to the public on a daily or weekly basis for more than 14 days in a calendar year, where the property is not occupied by an owner or manager during the rental period.

This guide provides comprehensive information for investors and operators seeking to establish or maintain short-term rental properties in Sioux Falls, covering all regulatory requirements from city, county, and state levels.

How to Start a Short-Term Rental Business in Sioux Falls

Step 1: Research and Preparation

Before purchasing or converting a property, research local zoning regulations to ensure short-term rentals are permitted in your target area. Verify that your property location allows short-term rental operations and identify any additional requirements such as parking or occupancy restrictions.

Step 2: Obtain Required State Licenses

Before applying for local permits, secure these state licenses:

• South Dakota Sales Tax License from the Department of Revenue
• Lodging License from the South Dakota Department of Health

Step 3: Complete Local Training Requirements

• Mandatory two-hour training must be completed before permit issuance
• Training is available online and provides a certificate upon completion
• Exemption: If your property will be managed by someone licensed as a broker, broker associate, property manager, or residential rental agent with the South Dakota Real Estate Commission, you are exempt from the training requirement

Step 4: Apply for Local Residential Rental Permit

• Apply through the City's Customer Self Service (CSS) system
• Application must be completed before any advertisement, soliciting, or occupancy
• Permit is required per rental street address
• Permit fee: $50 per address (effective July 1, 2024)

Step 5: Designate Local Contact (If Applicable)

If you reside more than 50 miles from Sioux Falls city limits, you must provide a separate contact person who lives within 50 miles and can address property upkeep and emergency issues.

Required Documents, Permits, Licenses, and Guidelines

State-Level Requirements

• South Dakota Sales Tax License
• South Dakota Department of Health Lodging License
• Tax identification numbers (EIN or SSN)
• Business registration (if operating as formal business entity)

City of Sioux Falls Requirements

Residential Rental Permit Application must include:

• Property owner's name, email, mailing address, and phone number
• Street address of the rental unit
• Number and type of units (apartment, duplex, single-family house, etc.)
• If owner resides >50 miles from Sioux Falls: Local contact information (name, email, phone, mailing address)
• If managed by licensed real estate professional: Name, mailing address, email, phone number, and license number
• Proof of completion: Two-hour training course certificate OR proof of South Dakota Real Estate Commission licensure
• Proof of state licenses: Sales tax license and health department lodging license
• $50 permit fee per address

Supporting Documentation

• Property ownership proof (deed, mortgage statement)
• Property floor plans for safety standards verification
• Insurance coverage documentation
• Guest registration information system
• Emergency contact procedures

Specific Regulations for Short-Term Rentals

City of Sioux Falls Regulations

• Definition: Properties rented more than 14 days annually, not owner-occupied during rentals
• Exemptions: Properties rented 14 days or fewer annually, bed and breakfast establishments, on-campus housing, hospitals, nursing homes, and motels
• Occupancy Limit: Maximum of 3 people per bedroom
• Parking Requirement: 1 parking space per bedroom
• Local Contact: Required if owner lives more than 50 miles away
• Guest Information Requirements: Provide guests with document including:
  • Emergency phone numbers (property owner/contact and city emergency/non-emergency)
  • Physical address of the rental unit
  • Statement requiring guests to be courteous to neighbors and respect property boundaries

Permit Revocation and Enforcement

• Revocation Trigger: Fourth health, nuisance, or code violation within three years (excluding snow/tree tickets)
• Appeal Process: Available through independent hearing examiner within 15 days of revocation decision
• Re-issuance Requirements: All violations must be corrected, approved by city inspection, and all citations paid
• Processing Fee: $50 for appeal submissions

County-Level Regulations

Note: Specific Minnehaha County regulations were not detailed in the provided sources. Check with county planning and zoning departments for additional requirements.

State of South Dakota Regulations

• Tax Framework: 4.5% state sales tax and 1.5% tourism tax on rentals under 28 days
• Lodging Standards: Basic health and safety requirements through Department of Health
• Local Authority: State enables municipal control over STR regulations
• Tax Filing: Regular filings required with South Dakota Department of Revenue

Operational Guidelines

• Change Notifications: Submit written notice of any application information changes within 30 calendar days
• Transfer Requirements: Written notice required for permit transfers within 30 days (no fee if properly notified)
• Record Keeping: Maintain detailed records for tax purposes and compliance verification

Contact Information for Local Authority

City of Sioux Falls - Code Enforcement/Permit Team

Email: rentalhousing@siouxfalls.gov

Phone: 605-367-8670 (Permit Team)

Physical Address: City of Sioux Falls City Hall 224 W. Ninth St. Sioux Falls, SD 57104

Online Services:

• Customer Self Service (CSS) Portal: css.siouxfalls.gov/energov_prod/selfservice/#/home
• Neighborhood Connect Map: neighborhoodconnect.siouxfalls.gov

South Dakota Department of Health (Lodging License): Website: doh.sd.gov/topics/food-lodging-safety/food-and-lodging-licensure-and-codes/lodging-licensure-and-codes/

South Dakota Department of Revenue (Sales Tax License): Website: dor.sd.gov

Links to Source Pages

• City of Sioux Falls Residential Rental Permit Page
• Customer Self Service Online Application
• Neighborhood Connect - Permitted STR Map
• South Dakota Department of Health - Lodging Licensure
• Sioux Falls Residential Rental Permit Ordinance
• Online Training Course
• City of Sioux Falls - Contact Information

Important Notes for Investors:

• Regulations are actively evolving; stay current with city communications
• Budget for compliance costs including permits, licenses, training, and insurance
• Consider professional property management services for local compliance and operations
• Maintain detailed records for tax and regulatory compliance
• Engage proactively with neighbors and community to ensure positive relationships

This guide reflects current regulations as of the information provided. Investors should verify current requirements with local authorities before making investment decisions or initiating operations.