State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families. Go to the Kiplinger Tax Map South Dakota Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Tax-Friendly Sure, it's cold in the winter. But low taxes will offset some of the cost of staying warm in the Mount Rushmore state. South Dakota has no income tax, and the combined state and local sales tax rate is below average for the U.S. Property taxes are a bit above average, but they're not high enough to cancel the state's otherwise favorable tax rating for middle-class families. Income Tax Range South Dakota has no state income tax. Sales Tax 4.5% state levy. Localities can add as much as 4.5%, and the average combined rate is 6.4%, according to the Tax Foundation.Groceries: TaxableClothing: TaxableMotor Vehicles: Exempt from ordinary sales tax, but taxable under special 4% excise taxPrescription Drugs: Exempt Real Property Taxes In South Dakota, the median property tax rate is $1,288 per $100,000 of assessed home value. Motor Fuel Taxes Gasoline: 30¢ per gallon. Diesel: 30¢ per gallon. Sin Taxes Cigarettes: $1.53 per packOther tobacco products: 35% of the wholesale priceBeer: $0.27 per gallonWine: $0.90 per gallon ($2.07 if sparkling) Liquor: $3.93 per gallon2% wholesale tax also due on wine and liquor.Marijuana: A 15% excise tax was authorized by a November 2020 ballot initiative, but the South Dakota Supreme Court invalidated the ballot initiative in November 2021 Annual Car Taxes and Fees An annual vehicle license fee based on the car's weight and age is imposed. Estate and Inheritance Taxes No estate or inheritance tax.