South Dakota Income Tax Calculator

Taxes in South Dakota

South Dakota State Tax Quick Facts

• Income tax: None
• Sales tax: 4.2% - 10.4%
• Property tax: 1.14% average effective rate
• Gas tax: 30 cents per gallon of regular gasoline

When considering all types of taxes, South Dakota is one of the most taxpayer-friendly states in the U.S. It is one of the few states without a personal income tax and its sales taxes are in the bottom third of the country. Sales tax rates range from 4.2% to 10.4% when including local rates, for a combined average of 6.111%. The only major tax in South Dakota that stands above the national average is its property tax, which is 1.14%, compared to the 0.90% national mark.

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South Dakota Income Taxes

If you want to avoid income taxes, you should consider relocating to South Dakota, as there's no income tax in the state. This means your income from wages, salaries, capital gains, interest and dividends are not taxed at the state level. Furthermore, taxpayers in South Dakota do not need to file a state tax return.

South Dakota Sales Tax

South Dakota’s state sales tax rate is 4.2%. In addition, cities in South Dakota have the option of collecting a local sales tax of up to 6.2%.

Sales tax in the Mount Rushmore State applies to all retail sales, leases or rentals of tangible personal property, services and electronically downloaded products. Unless an item or service is specifically exempt, the sales tax applies.

South Dakota has sales tax exemptions on a number of items and services. Exempt services include travel agencies, banking services performed by registered institutions, social services, agricultural services, educational services and medical services. Exempt products include prescription drugs, lottery tickets, purchases made with food stamps and water purchased in bulk or through a water supply system. All food sales are taxed in South Dakota (excluding those made with food stamps).

South Dakota Property Tax

Property taxes in South Dakota are the principal source of revenue to support local services like schools, law enforcement, libraries and parks. Property taxes are administered at the local level, but the state oversees property assessments to ensure fairness and compliance with state law. The state’s average effective tax rate is 1.14%, the 19th-highest rate in the country. Rates vary significantly between counties, though.

If you are considering buying a home or thinking about refinancing in the Mount Rushmore State, have a look at our South Dakota mortgage guide. It includes the most relevant information you’ll want to be familiar with before getting a mortgage.

South Dakota Gas Tax

The state gas tax in South Dakota is 30 cents per gallon of regular gasoline. This is the 25th-highest rate in the U.S.

South Dakota Cigarette Tax

Cigarettes in South Dakota are taxed at a rate of $1.53 per pack of 20, slightly lower than the national mark.

South Dakota Alcohol Tax

Along with the sales tax rates described above, some cities in the state levy an additional 1% tax on alcohol sales (bringing the total rate up to 7.5% in many cities). Alcohol in South Dakota is also subject to excise taxes, which are charged to the wholesaler and therefore included in the price.

The rates of these excise taxes vary by beverage type. The tax on liquor is $4.87 per gallon, the tax on wine is $0.93 per gallon and the tax on beer is 27 cents per gallon.

South Dakota Inheritance Tax

South Dakota’s inheritance tax was repealed in 2000, so the state no longer taxes inheritances. Likewise, there is no estate tax in South Dakota.

• The Sturgis Motorcycle Rally, held every August in Sturgis, South Dakota, brings over 400,000 people to the town of just over 6,000.
• South Dakota is the sixth largest producer in the U.S. of the corn-based fuel ethanol.
• The sculpting of Mount Rushmore began in 1927 and took 14 years to complete, costing just under $1 million. No workers died during its construction.