Governor Rhoden says the Sturgis Motorcycle Rally is all about Freedom™, but the state’s enthusiasm for the Rally is predicated mostly on taxes:
The South Dakota Department of Revenue estimates that tax collections from the 2025 Sturgis Motorcycle Rally totaled $1,581,736, marking a 13% increase over last year’s collections of $1,399,501. These figures include revenues from state sales tax, tourism tax, municipal sales tax, and municipal gross receipts tax.
State sales tax made up the largest portion, contributing $901,513—a notable rise from $790,805 collected in 2024. The 2025 rally also generated $299,619 in state tourism tax and $380,604 in municipal taxes.
This year’s rally saw a significant increase in vendor participation, with 1,181 temporary vendors, representing a 32% increase over 2024.
In the Northern Black Hills—which includes Sturgis and surrounding communities in Meade and Lawrence counties—1,069 vendors generated $1,169,300 in tax revenue, an 18% increase from last year. Meanwhile, in the Southern Black Hills, including Rapid City, Custer, Hill City, and Keystone, 112 vendors brought in $412,436 in tax collections [South Dakota Department of Revenue, press release, 2025.08.26].
Todd Epp questions whether that juice is worth the squeeze on safety and sanitation budgets:
But those revenues are only one side of the ledger. Hosting the Rally requires millions in public safety, sanitation, and infrastructure costs. Extra Highway Patrol troopers are dispatched to the Hills each August. Local governments expand jail staffing, add emergency medical services, and pay sanitation crews to handle tons of waste.
City audits in past years show Sturgis spending heavily on sanitation, overtime, and services. The Wall Street Journal reported in 2022 that local leaders view the Rally as both a boon and a burden, often struggling to cover the costs of hosting the world’s largest motorcycle rally [Todd Epp, “Sturgis Rally Subsidy-O-Meter: Does Sturgis Rally Pay for Itself?” Northern Plains News, 2025.08.27].
Whatever portion of the $380,604 in municipal taxes went to Sturgis didn’t make up for the $1.24 million the city had to cut from its budget this year:
The proposed 2025 Sturgis budget cuts $1.24 million in funds and eliminates five full-time positions, Acting Mayor Kevin Forrester said Monday.
Forrester presented a detailed explanation of the $10.08 million 2025 budget, which he has been working on with the city council and staff. The trimmed document compares to the city’s 2024 budget of $11.32 million.
…The 2025 budget calls for terminating five full-time employees. Those positions include the city engineer, two full-time Rally and Events staff, the city attorney, and a staff attorney [Wendy Pitlick, “Sturgis Cuts 5 Positions to Balance 2025 Budget,” Black Hills Pioneer, 2024.12.05].
Even with those cuts, Sturgis this year still spent more on its Rally and Events Department than it received in Rally tax revenue:
Some of the biggest cuts to the budget came from the city’s Rally and Events Department, where the budget was reduced from $1.5 million in 2024 to $817,000 in 2025 — a $683,000 difference.
“We’ve undergone significant adjustments to reduce expenses, enhance community events, increase revenue, and strengthen partnerships,” Forrester said.
He added that in recent years Rally and Events expenses have consistently exceeded revenue. He proposed working with the Sturgis Area Chamber of Commerce to take on additional responsibilities for the Rally and other community events, such as Music on Main. Some Rally activities have been eliminated to cut expenses, such as the mayor’s golf tournament and poker tournament [Pitlick, 2024.12.05].
Outside of the Rally and Events Department, the Sturgis 2025 city budget allocates $223,676 (see p. 44) for police reserves, special officers, and civilian security employees, plus $35,005 for retirement and FICA withholding and $108,500 for uniform shits and caps, body camera rental, and room and board for temporary police.
Rally freedom isn’t free.