Out of 51 U.S. jurisdictions, South Dakota ranks #26 overall for its friendliness towards faith-based nonprofit organizations. South Dakota has some policies that facilitate the contributions of faith-based nonprofits: South Dakota has no corporate income tax and no charitable registration or audit requirements for religious organizations to solicit donations in the state. South Dakota, however, has some policies that are burdensome to faith-based nonprofits operating in the state, such as a broad Blaine Amendment and laws regarding public accommodations that include no meaningful exemptions for religious organizations.
Religious Freedom:
State Constitutional Protection of Free Exercise:
0
/5
The South Dakota Constitution follows in lockstep with the federal constitution’s protections, meeting but not exceeding the required minimum protections of the First Amendment.
State Religious Freedom Restoration Act:
3
/5
South Dakota has enacted a RFRA that protects the religious free exercise of all individuals and entities by requiring government burdens on religious exercise to satisfy strict scrutiny.
Since these protections originate in a statute rather than the state constitution, South Dakota does not receive the highest score for this factor.
Religious Freedom for Nonprofits with Public Programming:
-5
/5
South Dakota’s nondiscrimination laws generally restrict religious freedom for religious organizations that offer public programming and facilities and provide no meaningful religious accommodations or exemptions.
Religious Freedom for Faith-Based Employers:
3
/5
South Dakota’s nondiscrimination laws related to employment are broad but provide strong accommodations or exemptions to generally protect the autonomy of the vast majority of religious organizations.
Protections for Religious Exercise in State of Emergency:
0
/5
South Dakota law provides that religious worship can only be prohibited or restricted by an emergency order that applies equally to all comparable secular entities in the jurisdiction, as required by Tandon v. Newsom.
Blaine Amendment:
-5
/5
The South Dakota Constitution contains a Blaine Amendment that broadly restricts faith-based organizations’ freedom to participate in public benefit programs on the same terms as similarly situated secular institutions. Current U.S. Supreme Court precedent has rendered this language ineffective, but it could become effective in the future if Court precedent changes.
Regulatory Freedom:
Nonprofit Religious Corporation Act:
0
/5
South Dakota’s nonprofit corporation law mentions the option for nonprofit corporations to incorporate for religious purposes. However, the law lacks both: (a) specific provisions to protect the right of nonprofits incorporated for religious purposes to self-government in internal affairs and (b) an option to incorporate expressly as a nonprofit religious corporation.
Standards of Conduct for Directors of Religious Organizations:
-3
/5
South Dakota law is silent as to whether a director, in the fulfillment of the director’s fiduciary duties, may rely on the opinion of individuals who can reasonably be assumed to have expertise on a certain matter, and the law does not expressly permit a director to rely on guidance from religious figures within his or her faith tradition.
Charitable Registration Law:
5
/5
South Dakota has no charitable solicitation registration requirements.
Audit Requirements Pursuant to Charitable Registration:
5
/5
South Dakota has no charitable registration requirement, and therefore no audit requirement.
Corporate Income Tax:
5
/5
South Dakota does not impose a corporate income tax.
Sales and Use Tax, Sales:
-3
/5
South Dakota imposes a sales and use tax on religious organizations’ sales and only provides limited exemptions for certain items.
Sales and Use Tax, Purchases:
-3
/5
South Dakota imposes a sales and use tax on religious organizations’ purchases and only provides limited exemptions for certain subsets of religious organizations, such as those that exclusively work for the relief of the poor, distressed or underprivileged.
Property Tax:
1
/5
South Dakota imposes property tax and provides only fragmented property tax exemptions that include only a narrow subset of religious organizations or that apply only to a narrow category of religious and/or charitable property uses.
