Gas Taxes by State, 2026
California levies the highest tax on gasoline at 73.6 cents per gallon (cpg), followed by Illinois at 70.4 cpg and Indiana at 63.1 cpg.
10 min read
South Dakota | #2 Overall
South Dakota is one of only two states to forgo individual income, corporate income, and gross receipts taxes. Consequently, the state relies heavily on its sales tax, which nevertheless retains a highly competitive rate, though one imposed on an overbroad base. It applies to most final personal consumption—which is appropriate—but also to a wide range of business inputs, which causes harmful tax pyramiding.
South Dakota relies on relatively high property taxes to fund local government, but the property tax base is competitive in that the property tax does not apply to tangible personal property or business inventory. Furthermore, the property tax applies to all classes of property uniformly, which is important for maintaining neutrality and preventing distortions, and the state does not have an estate or inheritance tax.
| Category | Rank | Rank Change | Score |
|---|---|---|---|
| Overall | 2 | 0 | 7.71 |
| Corporate Taxes | 1 | 0 | 10.00 |
| Individual Income Taxes | 1 | 0 | 10.00 |
| Sales Taxes | 31 | 0 | 4.51 |
| Property Taxes | 8 | 3 | 5.94 |
| Unemployment Insurance Taxes | 20 | 1 | 5.32 |
- Learn more about South Dakota Taxes
-
Share your state results
Compare Neighboring States
Tax Data by State
Get facts about taxes in your state and around the US
More on South Dakota
Vehicle Miles Traveled Taxes Need Not Invade Drivers’ Privacy
Privacy concerns are a primary driver of opposition to vehicle miles traveled (VMT) tax systems, but VMT taxes do not need to invade drivers’ privacy to efficiently fund the roads.
6 min read
Electric Vehicle Tax Treatment by State, 2026
As the market share of electric vehicles (EVs) on the road grows, the gas tax’s ability to fund road projects and decrease traffic congestion erodes. Both federal and state real tax revenue per vehicle mile traveled has been on a steady decline for decades, creating a fiscal gap for road expenditures even as the demand for road infrastructure improvements has grown.
6 min read