Sturgis temporary vendors give state $1.7 million in tax money

KELOLAND.com Original

STURGIS, S.D. (KELO) — The state of South Dakota made $1.7 million from temporary vendors at the Sturgis Motorcycle Rally this year.

That’s only a small fraction of the revenue generated by this year’s rally, said Daniel Ainslie, the city manager for Sturgis.

“What the state releases is only about 5% to 10% of actual sales that occurred during the rally,” Ainslie said.

The $1.7 million does not include sales tax revenue from hotels, campgrounds, bars and similar venues in the Sturgis and Black Hills area, Ainslie said.

It does include $1,038,561 in state sales tax as well as tourism tax and municipal tax.

Although the state’s tourism tax is a 1.5% tax that applies to all hotels and lodgings, it’s only a fraction of the sales tax generated, he said.

For example, a hotel in Deadwood may be renting rooms for $1,000 a night during the two-week period before and during the rally, Ainslie said. That could equal $300,000 in sales for that hotel in that period, Ainslie said.

If three or four hotels have similar rates, that’s $4.2 million in sales in just those hotels, he said.

Still, the state sales tax number is a good indication of the success of this year’s rally, Ainslie said.

Temporary vendors are those who are granted a sales license for only a certain period during the rally. The rally had 1,014 temporary vendors last year compared to 784 in 2019.

The state also collected $334,661 in the state tourism tax and $422,484 in municipal taxes.

Ainslie said the city will finish its calculations of the Sturgis Motorcycle Rally sales tax in about five weeks.

The city compares the July and August sales to May and June sales, Ainslie said. That has so far been the most accurate way to calculate Sturgis rally figures and increases, Ainslie said.

Those figures will include campgrounds, hotels, bars and similar venues.

The Sturgis Rally impact is spread throughout the Black Hills area.

The state department of revenue said the northern Black Hills, which includes Sturgis and other communities in Meade and Lawrence Counties, accumulated $1,341,688 in tax from 816 vendors.

The southern Black Hills, which includes Rapid City, Custer, Hill City and Keystone collected $454,019 in tax from 198 temporary vendors.

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