South Dakota Tax Guide 2025

Explore South Dakota's 2025 state tax rates for income, sales, property, retirement, and more. Learn how South Dakota compares nationwide.

South Dakota flag blowing in the wind on a cloudy day used for a South Dakota state tax article
(Image credit: Getty Images)

South Dakota state tax: Overview

Thinking about taxes in South Dakota? Here's the scoop: The state doesn’t take a bite out of your paycheck as there’s no income tax here, which is a big win for many residents. Plus, the combined state and local sales tax rate is relatively low compared to much of the country.

But there’s a catch: sales tax is charged on both groceries and clothing, which can add up. And while you might save on income and sales taxes, keep in mind that South Dakota’s property taxes are on the higher side compared to other states.


[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%
https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

South Dakota income tax

picture of Pierre South Dakota waterfront

(Image credit: Getty Images)

South Dakota has no income tax.

South Dakota retirement taxes

You won’t pay any state income taxes in South Dakota. That’s because there is no personal income tax in South Dakota. There is no estate or inheritance tax in the state either.

  • Tax on Taxable Income: N/A
  • Social Security: Not taxable
  • Pensions: Not taxable
  • 401(k) and IRA Distributions: Not taxable

South Dakota sales tax

image of shopping car with money in it

(Image credit: Getty Images)

The sales tax in South Dakota is 4.20%. The average local sales tax is 1.91%, resulting in a combined sales tax rate of 6.11%, according to the Tax Foundation.

Source: Tax Foundation

  • Groceries: Taxable
  • Clothing: Taxable
  • Motor Vehicles: Exempt from ordinary sales tax, but taxable under a special 4% excise tax
  • Prescription Drugs: Taxable

How much is South Dakota property tax?

little model house on a table

(Image credit: Getty Images)

In South Dakota, the median property tax rate is 1.01% of assessed home value, according to the Tax Handbook.

South Dakota Property Tax Breaks for Retirees

South Dakota offers a property tax homestead exemption for homeowners 70 or older (or surviving spouses), which delays payment of property taxes until the property is sold. Taxes are a lien on the property.

A property tax "freeze" is also available for seniors 65 and older. To qualify for the assessment freeze, you must meet income requirements and have resided in a single-family dwelling for at least 200 days of the previous calendar year.


South Dakota gas tax

rendering of a yellow car against a yellow background

(Image credit: Getty Images)
Swipe to scroll horizontally

Product

Tax Amount

Gasoline

$0.28 per gallon

Diesel

$0.28 per gallon

Source: Sales Tax Handbook


South Dakota taxes on tobacco and alcohol

Swipe to scroll horizontally

Product

Tax Amount

Cigarettes

$1.53 per pack

Other Tobacco Products

35% of the wholesale price

Medical Marijuana

0.00%

Recreational Marijuana

19.50% (4.50% cannabis sales tax + 15% state excise tax)

Source: Sales Tax Handbook

Swipe to scroll horizontally

Product

Tax Amount

Beer

$0.27 per gallon

Wine

$0.93 per gallon

Liquor

$3.93 per gallon

There is also a 2% wholesale tax on wine and liquor.

Source: Sales Tax Handbook

South Dakota estate and inheritance taxes

South Dakota has no estate or inheritance tax.

Related Content

Kelley R. Taylor
Senior Tax Editor, Kiplinger.com

As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.