Sioux Falls Short Term Rental Regulation: A Guide For Airbnb Hosts

Do you own a place in Sioux Falls and you're weighing whether to put it on Airbnb or Vrbo? Well, the good news is that South Dakota has never passed a law banning short-term rentals, and neither has the city. What changed is how closely Sioux Falls, South Dakota now checks up on you. As of January 1, 2024, every long- and short-term rental in the city needs a permit, and short-term units carry extra rules on top: how many guests you can sleep, how many cars you can park, and which state licenses you need before you ever list.

That's a real shift from the old system, which just asked owners to register for free and move on. The current ordinances, § 150.177 and § 159.303, both passed in late 2023, fold short-term rentals into the same permit as long-term rentals, then stack a handful of short-term-only conditions on top: three guests per bedroom, one parking space per guest bedroom, and proof you've registered with the state as a vacation home. None of it is prohibitive, mind you. It's paperwork and a $50 fee, not a ban.

So let's walk through what it actually takes to do this properly in 2026: the permit itself, what documents Sioux Falls wants, the taxes that stack on a booking, how hard the city actually enforces this, and who picks up the phone when you have a question. Every figure below comes from the city's own ordinances and the state's own tax pages, checked in July 2026. If you're weighing a Sioux Falls property against another market, run the numbers through BNBCalc first.

What are short term rental (Airbnb, VRBO) regulations in Sioux Falls, South Dakota?

Before you run those numbers, it helps to see the whole shape of the rule, because two separate pieces of the Sioux Falls Code of Ordinances do the work here, and they were both passed within a week of each other in the fall of 2023.

The first piece, § 150.177 (Ord. 109-23, passed November 21, 2023), is the permit rule. It applies to every residential rental in the city, long-term or short-term, and it replaced the city's old free registration system entirely. A short-term rental, under the city's own definition, is any home, cabin, or similar building that's rented, leased, or furnished in its entirety to the public on a daily or weekly basis for more than 14 days in a calendar year, where the owner or manager isn't present during the stay. That definition excludes bed and breakfasts, which get their own separate rules, and it doesn't apply to on-campus housing, hospitals, nursing homes, or motels.

The second piece, § 159.303 (Ord. 98-23, passed October 24, 2023), is a zoning rule specific to vacation home rentals. It caps occupancy at three people per bedroom, requires one off-street parking space per guest bedroom, and makes you register with the State of South Dakota as a vacation home. Your contact information as owner or manager has to be posted both inside and outside the unit, and it has to be on file with the city's Planning and Development Services Department too.

Put the two together and the shape becomes clear: a permit that covers you regardless of rental length, plus a set of short-term-specific conditions layered on top. Nothing in either ordinance bans short-term rentals outright, and nothing in South Dakota law lets the city do that either, since the state legislature has never passed a preemption statute either way. What the city did instead was tighten who's accountable when something goes wrong.

Starting a Short Term Rental Business in Sioux Falls

That accountability question is really the first thing to think through before you buy anything, because Sioux Falls isn't trying to shrink the short-term rental market, it's trying to know who's running it. Roughly 650 short-term vacation rentals were operating within city limits as of an October 2023 count from the Sioux Falls Area Chamber of Commerce, the same reporting that captured the neighbor complaints, cars parked on the street, and noise that pushed the City Council toward the current rules. That's a market that already existed and kept growing, not a market being phased out.

What's different from a city like New York or Honolulu is that Sioux Falls doesn't cap the number of listings, doesn't require you to live on site, and doesn't wall short-term rentals off into certain zones the way a lot of resort towns do. Buy a house, a duplex unit, or a cabin-style property anywhere residential zoning already allows a dwelling, and you can list it, provided you clear the permit and the vacation-home conditions in § 159.303. The trade-off is that every one of those conditions is mandatory rather than optional: the occupancy cap, the parking ratio, and the state registration all apply the moment you take your first booking.

One thing worth flagging early, since it changes the math on a spare-bedroom or basement-suite plan: the 14-day threshold in the city's definition only pulls a rental into the short-term-rental bucket if it's unhosted and rented whole to guests. Rent out a room in your own home while you live there, and you're generally operating under different, lighter rules than a whole unit sitting empty between guests. Either way, though, don't skip the permit step. It's required for both.

Short Term Rental Licensing Requirement in Sioux Falls

That permit step is where the real work happens, so let's get into what it actually asks for. Every owner has to file a residential rental permit application with the city before advertising, soliciting, or letting anyone occupy the unit, and the fee is $50 per address, in effect since July 1, 2024. New construction gets the fee waived if the permit is issued before a tenant ever moves in.

Before the city approves anything, though, you, or whoever manages the property, has to complete a one-time, minimum two-hour training course approved by the city. You're exempt only if the property is managed by someone licensed with the South Dakota Real Estate Commission as a broker, broker associate, property manager, or residential rental agent, in which case their license number substitutes for the training certificate.

Short-term rentals carry two more requirements that long-term rentals don't. Under § 150.177(f), you need proof of a South Dakota sales tax license, or documentation that a third party, like your booking platform, remits sales tax on your behalf, plus proof of a South Dakota Department of Health lodging license for vacation homes. That state license isn't free. The Department of Health's own lodging license application prices a Vacation Home license at $70 for a full year (January through December) or $35 for a half year starting July 1, inspection fee included either way. It expires every December 31, so keep in mind you'll be renewing it annually alongside the city permit.

Approval isn't automatic. The city can deny an application outright if you misrepresent the required information, or if your history shows three or more code violations with citations and fines in the previous three calendar years. Once you're permitted, you stay permitted unless ownership or contact information changes, though a permit can still be revoked if you rack up four code violations resulting in citations and fines within four consecutive calendar years, not counting snow or tree tickets. Appeal that revocation to an independent hearing examiner, in writing, within 15 days, and expect to pay a $50 processing fee on top.

Required Documents for Sioux Falls Short Term Rentals

Since a revoked permit means a hearing examiner and another $50 fee, it's worth getting the paperwork right on the first try. The application itself, filed through the city's Customer Self Service portal, asks for:

• Your name, mailing address, phone number, and email as property owner.
• A local contact within 50 miles of Sioux Falls, with their own name, phone, email, and address, if you live farther away than that.
• The street address of the rental unit, plus the number and type of units on the property.
• The name, license number, and contact details of your broker, property manager, or rental agent, if you use one.
• Written disclosure of any code violations against you or the responsible party within the previous three years.
• Your two-hour training certificate, unless you're exempt through a licensed manager.

Short-term rental applicants add two documents to that list: proof of your South Dakota sales tax license, or a statement that your platform remits it for you, and proof of your Department of Health vacation home lodging license. Make sure you keep both current, because the permit application references them directly.

There's also a document your guests need to see, not the city. Every short-term rental has to hand guests a notice containing an emergency phone number for you or your local contact, the emergency and non-emergency numbers for the City of Sioux Falls, the property's physical address, and a required line telling guests to be courteous to all neighbors and to respect property boundaries. Do check that you've posted your contact information both inside and outside the unit too, per § 159.303(e), since that's a separate requirement from the guest notice.

Sioux Falls Short Term Rental Taxes

Assuming you get through all that and are able to start hosting, there's still tax to deal with, and in Sioux Falls it stacks four layers deep. Two come from the state, two from the city, and together they land close to 8.7% on a typical short stay.

Tax	Rate	Collected by
State sales and use tax	4.2%, reverting to 4.5% on July 1, 2027	South Dakota Dept. of Revenue
State tourism tax	1.5%	South Dakota Dept. of Revenue
Sioux Falls municipal sales tax	2.00%	South Dakota Dept. of Revenue (city's share)
Sioux Falls municipal gross receipts tax (MGRT)	1.00%	South Dakota Dept. of Revenue (city's share)

The state's temporary 4.2% rate, cut down from 4.5% by House Bill 1137 in 2023, is scheduled to revert on July 1, 2027 under Senate Bill 245, signed in March 2026, so treat that number as one that moves rather than one that's locked in. The tourism tax and the sales tax both skip anyone renting for 10 days or fewer in a calendar year, a threshold the state's own hotel and lodging fact sheet calls casual or occasional activity.

The city adds its own 2.00% municipal sales tax and 1.00% municipal gross receipts tax on top, the MGRT applying specifically to lodging, restaurants, alcohol, and amusement admissions. All four get reported on the same return you file with the state, not separately with the city, so you're not managing four different tax accounts, just four line items on one.

Here's the part that actually saves you work. Airbnb's own tax page confirms it collects and remits all four of these automatically on eligible South Dakota bookings: state sales tax, municipal sales tax, MGRT, and tourism tax. A booking that comes through the platform already has the tax handled. Watch out for one thing, though. Airbnb's page still lists the state rate at 4.5%, which is the rate that resumes in 2027, not the 4.2% the state currently charges, so don't assume that figure is your current combined total. Direct bookings you take off-platform are a different story. Register for a South Dakota sales tax license yourself, the same one your rental permit application already required proof of, and remit those manually.

South Dakota wide Short Term Rental Rules

That platform convenience only covers taxes, though, and there's a layer of state law sitting above everything Sioux Falls does. South Dakota has never passed a law preempting cities from regulating or even banning short-term rentals, which is exactly why Sioux Falls could pass its own permit and zoning rules in the first place. A 2024 bill, House Bill 1149, would have barred cities and counties from adopting ordinances that ban short-term rentals outright, but it died 7-5 in the House Local Government Committee that February and hasn't been reintroduced since. So for now, whatever a South Dakota city decides is where the real authority sits, and that authority differs from town to town: Hill City banned new short-term rentals in residential zones back in 2022, while Sioux Falls chose licensing over prohibition.

There's no statewide short-term rental license, either. What every host needs, regardless of city, is a South Dakota sales tax license before renting to transient guests, the same one Sioux Falls' own permit application checks for. Renting 10 days or fewer in a calendar year counts as casual or occasional activity and is exempt from that requirement.

If you're comparing Sioux Falls against another South Dakota market, or you're not sure which city's rules actually apply to a specific address, our South Dakota statewide guide walks through the state framework in more depth, and the Rapid City guide covers how a very different Black Hills market handles the same questions.

Does Sioux Falls strictly enforce STR rules?

Comparing markets is one thing. Knowing whether Sioux Falls actually checks up on you is another, and the honest answer is that it enforces more than it used to, but the mechanism is complaint-driven rather than automatic. The permit requirement itself is the first layer. Operate without one and you're violating § 150.177 directly, which carries the § 10.999 general penalty of up to $500 in fines and up to 30 days in jail, with each day of continued violation counted as a separate offense.

Getting a citation isn't the same as getting a complaint, though, and that distinction matters more than it sounds. At-large Councilmember Rich Merkouris made the point directly while the ordinance was still being debated: "This is not two complaints, this is two violations. This is not neighbors calling in to complain. There actually has to be a citation issued," he said, according to Dakota News Now's coverage of the November 2023 committee hearing. A neighbor calling the city doesn't cost you your permit by itself. An inspector or officer actually writing you up does, and it takes four of those within four consecutive years before the city revokes anything.

Local reaction to the ordinance, going through the reporting available, leaned more supportive than you might expect from a rule that adds paperwork and a fee. Sioux Falls realtor and host Daniel Brunz told Dakota News Now the change was "the city playing catch-up, and trying to lay a platform to manage it accordingly." He added that it "holds accountable people that are not doing as good of a job." That's not a universal opinion, since any new fee draws some pushback. Still, it's a genuine signal that at least some working hosts saw the rule as leveling the field rather than shutting it down.

What I couldn't confirm on an official source is a current denial or revocation rate, the kind of annual reporting a city like New York City publishes for its own registration program. Sioux Falls hasn't published anything comparable that I found, so treat enforcement here as real but not heavily documented in public data, at least not yet.

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

That's real, but it's still worth planning around, so here's the order that keeps you from wasting the $50 fee or the training time.

1. Confirm your property's zoning allows the use. Vacation home rentals fall under § 159.303, so check that your address isn't in a zone that restricts the use before you buy or convert anything.
2. Register with the state as a vacation home first. You'll need this on file before the city permit process is complete, since § 159.303(b) requires it directly.
3. Get your South Dakota sales tax license. Apply through the state's Tax License Application portal; this same license doubles as one of your permit-application documents.
4. Apply for your South Dakota Dept. of Health vacation home lodging license. Budget $70 for a full year or $35 for a half year, and expect an on-site inspection before it's issued.
5. Complete the two-hour rental training, unless a licensed South Dakota real estate broker or property manager will run the property for you.
6. File your residential rental permit application through the city's Customer Self Service portal, with the $50 fee and every document above attached.
7. Set up the required postings and guest notice before your first booking: contact info inside and outside the unit, plus the emergency-contact guest document.
8. Confirm your platform is collecting tax correctly, or register to remit it yourself if you're taking direct bookings.
9. Remember to diarize your renewal dates. The state lodging license expires every December 31; the city permit doesn't expire on a set date but does require prompt notice of any ownership or contact change.

Skip a step and you'll usually find out at the worst time, mid-application, when the city asks for a document you haven't got yet.

Who to contact in Sioux Falls about Short Term Rental Regulations and Zoning?

Since that document chase is where most people get stuck, here's exactly who to call for each piece.

Rental permit applications and the permit team

City of Sioux Falls Code Enforcement, Permit Team, administers § 150.177 and the online application.

• Email: [email protected]
• Phone: 605-367-8670
• Apply online: Customer Self Service portal

Zoning, occupancy, and vacation-home registration

Planning and Development Services administers § 159.303, including where your contact information gets filed.

• Address: 231 N. Dakota Ave., Sioux Falls, SD 57104
• Phone: 605-367-8010
• Hours: Monday-Friday, 8:00 a.m. to 5:00 p.m.

State sales tax license and remittance

South Dakota Dept. of Revenue, Sioux Falls office, handles your sales tax license and questions about the four tax layers on a booking.

• Address: 1501 South Highline Avenue, Suite 3B, Sioux Falls, SD (moved here in June 2025)
• Phone: 1-800-829-9188
• Hours: Monday-Friday, 8:00 a.m. to 5:00 p.m. CST

State health department lodging license

South Dakota Dept. of Health, Office of Health Protection, licenses your property as a Vacation Home lodging establishment.

• Address: 600 E Capitol Ave, Pierre, SD 57501-1700
• Phone: (605) 773-4945 for licensing questions, or (605) 773-3361 general

Whichever office you call, mention your property address up front. Every one of these departments cross-checks against a specific address, not your name.

What do Airbnb hosts in Sioux Falls on Reddit and Bigger Pockets think about local regulations?

Whichever office answers, the paperwork is only half the story, since what other hosts actually experience tells you more about the day-to-day reality than any ordinance section can. I wasn't able to read Reddit directly for this guide, since it blocks the kind of automated access this research relies on, so what follows leans on BiggerPockets, which is reachable, plus the local reporting already cited above, rather than any claimed survey of Reddit threads.

On BiggerPockets, Sioux Falls-based investor Joe Splitrock, a 23-year rental property veteran, described buying a short-term rental with only about $5,000 of his own cash into the deal, using a line of credit, and clearing roughly $13,000 in net cash flow over the following year after all expenses, including debt payments. He was careful to note that the number reads misleadingly high mostly because so little cash went into the deal up front, not because the property outperforms a bigger vacation-destination purchase, which is exactly the kind of caveat that separates an experienced host from someone chasing a headline percentage.

That tracks with the broader tone in the local coverage: hosts here don't sound like they're fighting the city so much as adjusting to it. Realtor and host Daniel Brunz's take, that the ordinance "holds accountable people that are not doing as good of a job," echoes what you'd expect from an operator who was already running things properly before the rule showed up. The training requirement and the $50 fee read as minor friction next to what stricter markets demand, and nobody in the sources I could actually verify describes Sioux Falls as hostile to short-term rentals. Cautious, maybe. Not hostile.

None of that changes the math, though. Once you know the rules, the number that actually decides whether a Sioux Falls short-term rental pencils out is revenue against what you'll pay in permits, licenses, and tax, and BNBCalc's Sioux Falls market page breaks that down street by street rather than leaving you to guess.

Frequently Asked Questions

Can you legally run an Airbnb in Sioux Falls in 2026?

Yes. Sioux Falls permits both long-term and short-term rentals citywide, with no cap on the number of listings and no zone-by-zone ban. Every owner needs a $50 residential rental permit from the city. Short-term rental owners add three conditions on top: a three-guests-per-bedroom cap, one parking space per guest bedroom, and state vacation-home registration. None of that stops you from listing, it just has to be done before you take your first booking.

How much does a Sioux Falls short-term rental permit cost?

The city permit itself is $50 per address, in effect since July 1, 2024, with no fee to transfer it if you sell the property, provided you give written notice within 30 days. Add the state layer on top: a South Dakota vacation home lodging license runs $70 for a full year or $35 for a half year starting July 1, renewing every December 31. Together, budget around $120 in the first year between the two licenses, before any training costs.

What happens if you rent your Sioux Falls property short-term without a permit?

Operating without the required permit violates § 150.177 directly and carries the city's general penalty. That means a fine of up to $500, up to 30 days in jail, or both, with each day the violation continues counted as a separate offense. Even with a permit, racking up four code violations with citations and fines within four consecutive years gets that permit revoked, and getting it reinstated means correcting every violation, passing a city inspection, and paying off any outstanding citations first.

Do you have to collect hotel or sales tax on a Sioux Falls Airbnb?

Usually not yourself, if you book exclusively through a major platform. Airbnb's own tax page confirms it collects and remits all four South Dakota tax layers automatically: the state sales tax, the state tourism tax, and Sioux Falls' own municipal sales tax and municipal gross receipts tax. The state sales tax runs 4.2% currently, rising to 4.5% in July 2027, the tourism tax is 1.5%, and the city adds 2.00% municipal sales tax plus 1.00% MGRT on top. Direct bookings outside a platform are your responsibility to register for and remit yourself.

Does Sioux Falls allow short-term rentals in every neighborhood?

Generally yes, wherever the underlying residential zoning already permits a dwelling, since Sioux Falls hasn't carved out short-term-rental-free zones the way some cities have. What does apply everywhere is § 159.303's conditions: the three-guests-per-bedroom cap, the one-space-per-bedroom parking requirement, and state vacation-home registration. Check your specific parcel's zoning before assuming, since restrictions tied to a homeowners' association or a specific overlay district can still apply even where the city ordinance itself doesn't prohibit the use.

Last verified: July 2026. Every ordinance, tax rate, state law, and contact detail in this guide links to or comes from its official source.