Municipal Bed, Board, & Booze Tax Goes Into Effect July 1

Effective July 1, an additional 1% tax will go into effect in the City of Freeman. The tax applies to all persons engaged in business within the Municipality of Freeman and includes the sale of leases or rentals of hotel, motel, campsites or other lodging accommodations; the sale of alcoholic beverages, as defined in SDCL 35-1-1; establishments where the public is invited to eat, dine or purchase and carry out prepared food for immediate consumption; ticket sales or admissions to places of amusement; and athletic and cultural events.

The cities of Freeman and Howard now join 89 other South Dakota municipalities who have been benefitting from the collection of a municipal gross receipts tax , also known as the “bed, board, & booze” tax. Revenue collected from this tax can be used by municipalities only for the purpose of land acquisition, architectural fees, construction costs, payment for civic cents, auditoriums or athletic facility building, including the maintenance, staffing and operations of such facilities, and the promotion and advertising of the municipality, its facilities, attractions and activities.

Action to implement this tax was taken by the Freeman City Council in January of this year through the approval of Ordinance 2021-03. The full ordinance can be found in the “Government” section of this website, with the South Dakota Department of Revenue’s listing of the services impacted by this tax also available.