On September 16, 2013 the Vermillion City Council established a Business Improvement District in accordance with South Dakota Codified Law 9-55-2. A BID can be funded by special assessments and/or an occupation tax. An occupation tax can be imposed against users of space within a district or upon rooms rented by a lodging establishment to transient guests. State law allows up to $2 per occupied room, per night lodging fee through the creation of a business improvement district. A board of directors is appointed by the City Council to make recommendations on the use of the funds. All expenditures must be approved by the City Council.