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Cost Of Doing Business

Companies who do business in Watertown, South Dakota can take advantage of low taxes, competitive incentives and a workforce work ethic that is second to none. Thanks to our business-friendly climate and low utilities, you can increase your bottom line when you make the move to Watertown.

We believe our low taxes are our #1 business advantage because it helps you positively affect your bottom line. The less you pay out…the more profits you keep.

Here you’ll find:
NO State Income Tax
NO Corporate Income Tax
NO Personal Property Tax
NO Business Inventory Tax
NO Inheritance Tax

Watertown has a 2.5% local sales tax in addition to the 4% sales and use tax payable to the state of South Dakota. There are some additional business taxes that are required by state and local law. They include: use, real property, unemployment and workers compensation. To read more about these taxes, click here.

Watertown Real Property Tax rate is $21.505/$1,000

How do we compare to other states and their tax structure? Click here for a 50 state comparison.

Business Incentives and Financing Options
Watertown and the state of South Dakota offer a variety of business tax incentives and refunds. Companies expanding or moving to the state can apply for sales and contractor excise tax refunds on qualifying projects. For a list of requirements, visit the Governor’s Office of Economic Development’s website.

South Dakota also offers a variety of state backed loans and financing options. Watertown Development Company can assist you with finding local lenders and opportunities. Let us help you make the move to Watertown.

Property Tax Incentive
Codington County offers a five year abated property tax on any new commercial or industrial construction over $30,000 on graduated rates as follows:

1st Year: 20% of the assessed property value
2nd Year: 40% of the assessed property value
3rd Year: 60% of the assessed property value
4th Year: 80% of the assessed property value
5th Year: 100% of the assessed property value

The abatement does not apply to existing buildings. The abatement is applied in the first year following completion of the facility. This formula would also apply to any future expansions. Depending on the size and cost of the building, this may add significant savings to your client over a five year time frame.

Utilities & Local Property Taxes
Watertown has the lowest utilities in the state because the city owns its own water and power company. By cutting out the middle man we can keep costs low and provide some of the most competitive rates in the upper Midwest for both residential and industrial users.

Watertown serves their customers through a looped 115 kv system with five 115/12.5 kv substations throughout the city. Total capacity of their distribution system is roughly 120MW with a peak demand of 73MW. The East substation has a capacity of 28MW with just over 9MW of the capacity currently being utilized. 35% of the requirements are served from Western Area Power Administration (hydro) and 65% Missouri River Energy Services. Our industrial power rate is $.0315/KWH with $9.15/KW demand with a 2% discount on demand and energy charges when electing service at primary voltages.

For current rates, please visit Watertown Municipal Utilities website or download our Utility Comparisons.


Request More Info

The Watertown Development Company is a non-profit organization established to own and operate buildings, lands and development areas for the economic benefit of Watertown. Use the form below to send a message to our executive team and we’ll be sure to respond as soon as we can.
  • You can call us directly at (605) 884-0340 or toll free at 1-888-898-6767