State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2021

South Dakota State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

South Dakota

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The Bottom Line
Flag of South Dakota

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: Taxable
Clothing: Taxable
Motor Vehicles: Exempt from ordinary sales tax, but taxable under special 4% excise tax
Prescription 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 pack
Other tobacco products: 35% of the wholesale price

Beer: $0.27 per gallon
Wine: $0.90 per gallon ($2.07 if sparkling)
Liquor: $3.93 per gallon
2% 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.