Skip to content

Taxes In South Dakota

South Dakota Tax Rates, Collections, and Burdens

How does South Dakota’s tax code compare? South Dakota does not have an individual income tax. South Dakota also does not have a corporate income tax. South Dakota has a 4.50 percent state sales tax rate, a max local sales tax rate of 4.50 percent, and an average combined state and local sales tax rate of 6.40 percent. South Dakota’s tax system ranks 2nd overall on our 2023 State Business Tax Climate Index.

Each state’s tax code is a multifaceted system with many moving parts, and South Dakota is no exception. The first step towards understanding South Dakota’s tax code is knowing the basics. How does South Dakota collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures: How Does Your State Compare?

See Related Articles

Tax Data by State

Get facts about taxes in your state and around the U.S.

Explore Data

State Tax Data

Individual Taxes

Top Individual Income Tax Rate
Does Not Have an Individual Income TaxSee Full Study
State Local Individual Income Tax Collections per Capita
$0Rank:
State and Local Tax Burden
9.1%Rank: 14See Full Study

Business Taxes

Top Corporate Income Tax Rate
Does Not Have Top Corporate Income Tax RateSee Full Study
State Business Tax Climate Index Ranking
2See Full Study

Sales Taxes

State Sales Tax Rate
4.50%Rank: 36See Full Study
Average Local Sales Tax Rate
1.90%See Full Study
Combined State and Average Local Sales Tax Rate
6.40%Rank: 32See Full Study
State and Local General Sales Tax Collections per Capita
$1788Rank: 5
State Gasoline Tax Rate (cents per gallon)
30¢Rank: 29
State Cigarette Tax Rate (dollars per 20-pack)
$1.53Rank: 29

Property Taxes

Property Taxes Paid as a Percentage of Owner-Occupied Housing Value
1.17%Rank: 17
State and Local Property Tax Collections Per Capita
$1606Rank: 26

All Related Articles

The Efficiency of State and Local Tax Administration of Local Taxes including Local Sales Taxes and Local Tourism Taxes

The Efficiency of State Administration of Local Taxes

The logic that has prevailed for local sales taxes should apply equally to other taxes that localities impose on multijurisdictional businesses, including local tourism taxes. The evidence is clear that central administration of local taxes reduces compliance costs without sacrificing local revenue.

15 min read
How does your state rank on corporate taxes Compare state corporate tax component on the 2023 State Business Tax Climate Index. Explore 2023 state corporate tax rank by state and year

Ranking State Tax Systems: Corporate Taxes

All corporate income taxes fall on capital investment, but the structure should not make matters worse, and policymakers should take care not to distort investment decisions through the use of targeted incentives for select firms or activities instead of a lower rate for all businesses.

2 min read
State reciprocity agreements including state income tax reciprocity agreements

Do Unto Others: The Case for State Income Tax Reciprocity

Remote and flexible work opportunities are here to stay, whether states like it or not. With enhanced opportunities to take their job with them wherever they please, more workers can factor tax burdens into their decision of where to live.

15 min read
marijuana policy, cannabis policy, federal taxation of recreational marijuana, MORE Act tax Marijuana Opportunity Reinvestment and Expungement Act

Cannabis Taxes Back on the Ballot in 2022

While changes to federal cannabis law are slow, changes at the state level are accelerating. Recreational cannabis is on the ballot in five states this November—Arkansas, Maryland, Missouri, North Dakota, and South Dakota—giving voters the ability to join 19 states that have already legalized recreational marijuana.

5 min read
north carolina tax competitiveness North Carolina tax reform North Carolina business tax reform

2023 State Business Tax Climate Index

While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.

129 min read
Taxes and interstate migration data from IRS and Census state migration trends show Americans moving to low-tax states

How Do Taxes Affect Interstate Migration?

IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.

12 min read
2022 combined federal and state corporate tax rates in 2022 combined corporate tax rates by state

Combined Federal and State Corporate Income Tax Rates in 2022

When examining tax burdens on businesses, it is important to consider both federal and state corporate taxes. Corporate taxes are one of the most economically damaging ways to raise revenue and are a promising area of reform for states to increase competitiveness and promote economic growth, benefiting both companies and workers.

2 min read