Overview of South Dakota Taxes
On a statewide basis, South Dakota does not levy a personal income tax. The state's sales tax is also among the lowest in the country. However, the average effective property tax rate in South Dakota is above the national average.
Number of State Personal Exemptions
Your Income Taxes Breakdown
|Tax Type||Marginal |
|Total Income Taxes|
|Income After Taxes|
* These are the taxes owed for the 2020 - 2021 filing season.
Your 2020 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2020 Tax Burden
Total Estimated Tax Burden $
Percent of income to taxes = %
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Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2019 - 2020 filing season based on the Trump Tax Plan.
How Income Taxes Are Calculated
- First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
- Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
- Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
- Your location will determine whether you owe local and / or state taxes.
- Last Updated: January 1, 2020...read more
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
Taxes in South Dakota
South Dakota State Tax Quick Facts
- Income tax: None
- Sales tax: 4.50% - 7.50%
- Property tax: 1.22% average effective rate
- Gas tax: 28 cents per gallon of regular gasoline and diesel
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 4.50% to 7.50% when including local rates, for a combined average of 6.40%. The only major tax in South Dakota that stands above the national average is its property tax, which is 1.22%, compared to the 1.07% national mark.
A financial advisor in South Dakota can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
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 4.50%. In addition, cities in South Dakota have the option of collecting a local sales tax of up to 3%. Most major cities only collect an extra 2%, though. The table below shows the state and city rates for the largest cities in South Dakota.
Sales Tax Rates(Updated December 2020)
|City||State Rate||City Rate||Total Sales Tax|
|North Sioux City||4.50%||2.00%||6.50%|
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 1.22%, the 17th-highest rate in the country. Rates vary significantly between counties, though, from a high of 2.69% in Todd County to a low of 0.76% in Jones County.
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 28 cents per gallon of regular gasoline. Diesel fuel faces the same state tax of 28 cents per gallon. These rates are the 17th- and 20th-highest rates in the U.S., respectively.
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 $3.93 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.
Places with the Lowest Tax Burden
Are you curious how your tax burden stacks up against others in your state? SmartAsset’s interactive map highlights the counties with the lowest tax burden. Scroll over any county in the state to learn about taxes in that specific area.
To find the places with the lowest tax burdens, SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country.
To better compare income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes.
In order to determine sales tax burden, we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a county by the household income after taxes. This balance is then multiplied by 35% to estimate the sales tax paid.For property taxes, we compared the median property taxes paid in each county.
For fuel taxes, we first distributed statewide vehicle miles traveled to the county level using the number of vehicles in each county. We then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, we calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax.
We then added the dollar amount for income, sales, property and fuel taxes to calculate a total tax burden. Finally, each county was ranked and indexed, on a scale of 0 to100. The county with the lowest tax burden received a score of 100 and the remaining counties in the study were scored based on how closely their tax burden compares.