South Dakota does not have an individual income tax. South Dakota does not have a corporate income tax but has a 4.20 percent state sales tax rate and an average combined state and local sales tax rate of 6.11 percent. South Dakota has a 1.00 percent effective property tax rate on owner-occupied housing value. South Dakota does not have an estate tax or inheritance tax. South Dakota’s gas tax is 30 cents per gallon, and its cigarette excise tax is $1.53 per pack of 20 cigarettes.
South Dakota raises tax revenue primarily through general sales taxes (44.8 percent of total state and local tax revenue), property taxes (32.6 percent), and other taxes (21.6 percent). South Dakota collects $5,298 in state and local tax collections per capita, carries $7,978 in state and local debt per capita, and has a 100 percent funded ratio of public pension plans. South Dakota’s tax system ranks 2nd overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and South Dakota is no exception. Use the tabs below to compare South Dakota taxes with other states and to see how South Dakota raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
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Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
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Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
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States compete with each other in a variety of ways, including in attracting (and retaining) residents. Sustained periods of inbound migration lead to (and reflect) greater economic output and growth. Prolonged periods of net outbound migration, however, can strain state coffers, contributing to revenue declines as economic activity and tax revenue follow individuals out of state.
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With most states experiencing reduced tax revenues due to the coronavirus pandemic, several are contemplating whether recreational marijuana legalization and taxation may be one avenue to raise new revenue. While states that have already legalized do raise meaningful revenue, lawmakers should remember that establishment of legal markets takes time.
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While many factors influence business location and investment decisions, sales taxes are something within lawmakers’ control that can have immediate impacts.
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The coronavirus relief package represents the second-largest recovery legislation, behind only the CARES Act, for a combined total of more than $3 trillion in support.
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On Monday, members of the bipartisan Gang of Eight negotiating an end-of-year pandemic relief package announced that they had settled on language and had divided the package into two bills: a pandemic aid package and a $160 billion state and local support package.
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A typical American household with four phones on a “family share” wireless plan can expect to pay about $270 per year (or 22 percent of their cell phone bill) in taxes, fees, and surcharges.
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Voters in four states, Arizona, Montana, New Jersey, and South Dakota, approved ballot measures legalizing recreational marijuana.
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President Joe Biden’s tax plan would yield combined top marginal state and local rates in excess of 60 percent in three states: California, Hawaii, and New Jersey (also New York City).
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Here are the state tax ballot measures to watch on Election Day 2020. Explore the most notable 2020 state tax ballot measures in 15 states.
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