Property Management Bookkeeping in South Dakota

Money held for owners in South Dakota is not your money, and South Dakota sets its own rules — through state law and the South Dakota Secretary of State-registered licensing regime — on how those funds are held, how often they are reconciled, and what records must exist. We keep the trust ledger reconciled to the bank with owner-level detail behind every balance; whether that satisfies South Dakota's specific requirement is a determination for you and your attorney, not us.

Security deposits in South Dakota are a liability, not income. South Dakota caps a residential deposit at one month's rent, and requires you to return or account for it within 45 days of move-out. That deadline is why the ledger has to be per-tenant rather than one pooled balance — a pooled figure cannot answer "what is owed to this tenant, and by when," which is the only question that matters when a deposit is disputed.

Registering to do business in South Dakota runs through the South Dakota Secretary of State, with tax accounts through the South Dakota Department of Revenue and employer accounts through the South Dakota Department of Labor and Regulation. South Dakota treats these as wholly independent, so being in good standing with one says nothing about the others — and the sales tax account is the one that accrues a real balance while you are not looking.

The South Dakota statewide base rate is 4.2%. Local rates stack on top and are generally sourced to the delivery address, so the effective rate varies within the state. Getting sourcing right is what keeps the liability account matching what you actually collected.