South Dakota Income Tax
South Dakota levies no state income tax on wages, salaries, or ordinary income. Residents owe no income tax at the state level, though federal income tax, Social Security, and Medicare payroll taxes still apply. Some states without an income tax offset revenue through higher sales or property taxes, so this page links to those calculators to help you build a complete picture of South Dakota's overall tax environment. If you recently relocated to South Dakota or are comparing states, use the sales tax and property tax tools below alongside the federal income tax calculator to assess your full tax burden. This page is sourced from South Dakota Department of Revenue and reflects current South Dakota tax law.
South Dakota has no state income tax. South Dakota levies no individual income tax. The state has never enacted a personal income tax. State and local government are funded primarily through sales and use taxes, property taxes, and excise taxes.
South Dakota has no income tax
South Dakota levies no individual income tax. The state has never enacted a personal income tax. State and local government are funded primarily through sales and use taxes, property taxes, and excise taxes. For residents, wages, salaries and investment income are not subject to state income tax in South Dakota.
South Dakota income tax: frequently asked questions
Does South Dakota have a state income tax?
No. South Dakota levies no individual income tax. The state has never enacted a personal income tax. State and local government are funded primarily through sales and use taxes, property taxes, and excise taxes.
Do I need to file a South Dakota state income tax return?
South Dakota does not collect a personal income tax, so there is no state income tax return to file. You still need to file a federal return with the IRS.
Does South Dakota have a state income tax?
No. South Dakota has never enacted an individual income tax. Residents owe no state tax on wages, salaries, investment income, retirement income, or any other personal income.
Does South Dakota have a sales tax?
Yes. South Dakota has a statewide sales tax rate of 4.2% (reduced from 4.5% effective July 1, 2023 under SB 30). Counties and municipalities may add local sales taxes on top of the state rate. This is the state's primary source of general revenue.
Is South Dakota a good state for retirees from a tax perspective?
South Dakota is often considered tax-friendly for retirees. The state imposes no income tax on Social Security benefits, pension income, 401(k) distributions, or IRA withdrawals. Residents still pay federal income tax on applicable income.
What taxes does South Dakota impose?
South Dakota's main taxes include the state sales and use tax, property taxes (administered locally), excise taxes on fuel, tobacco, and alcohol, and bank franchise and insurance premium taxes. There is no individual income tax and no corporate income tax.
Official sources
- South Dakota no income tax confirmation: South Dakota Department of Revenue, as at Jun 12, 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 11 June 2026. See our methodology. General information, not financial or tax advice.