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 effective property tax rate in South Dakota is above the national average.
Your 2025 Estimated State Income Tax:
Breakdown of Your Income Taxes
Your Annual Take-Home Pay
About This Calculator
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.
How Income Taxes Are Calculated
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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).
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Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer.
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Based on your filing status, your taxable income is then applied to the tax brackets to calculate your federal income taxes owed for the year.
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Your location will determine whether you owe local and / or state taxes.
When Do We Update? - We check for any updates to the latest tax rates and regulations annually.
Customer Service - If you would like to leave any feedback, feel free to email info@smartasset.com.
Assumptions
Deductions
- "Other Pre-Tax Deductions" are not used to calculate state taxable income.
Credits
- The only federal credit automatically calculated is the Savers Credit, depending on your eligibility.
- We do not apply any refundable credits, like the Child Tax Credit or Earned Income Tax Credit (EITC).
- We do not apply state credits in our calculations.
Itemized Deductions
- If itemizing at the federal level, you may need to itemize at the state level too. Some states don't allow itemized deductions, which is accounted for in our calculations.
- When calculating the SALT deduction for itemized deductions, we use state and local taxes, and we assume your MAGI.
- We assume that there is no cap to itemized deductions, if a state allows them.
- We do not categorize itemized deductions (such as medical expenses or mortgage interest), which could be subject to specific caps per state.
Local Tax
- Depending on the state, we calculate local taxes at the city level or county level. We do not include local taxes on school districts, metro areas or combine county and city taxes.
- With the exception of NYC, Yonkers, and Portland/Multnomah County, we assume local taxes are a flat tax on either state taxable income or gross income.
Actual results may vary based on individual circumstances and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee income tax amounts or rates. Past performance is not indicative of future results.
SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.
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Taxes in South Dakota
South Dakota State Tax Quick Facts
- Income tax: None
- Sales tax: 4.2% – 10.4%
- Property tax: 1.02% median 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 5.939%. The only major tax in South Dakota that stands above the national median is its effective property tax (median property tax bill divided by median home value), which is 1.02%, compared to the 0.89% 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 some items and services, including medical devices and services, motor vehicle sales and raw materials for manufacturing.
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 1.02%, the 18th-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 26th-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.
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. 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 $4.93 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.