State-by-State Guide to Taxes on Retirees - South_Dakota
Tool | November 2019

State-by-State Guide to Taxes on Retirees

South Dakota

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The Bottom Line
Flag of South Dakota

Mixed Tax Picture

The Mount Rushmore State has no state income tax, so Social Security benefits and other forms of retirement income get a free ride. But sales taxes have a broad reach here (and include groceries). Property taxes are on the high side, too and property tax relief programs are limited to low income residents.

State Sales Tax

4.5% state levy. Localities can add as much as 4.5%, and the average combined rate is 6.40%, according to the Tax Foundation. Many services are taxed, as are groceries.

Income Tax Range

There’s no state income tax.

Social Security

Benefits are not taxed.

Exemptions for Other Retirement Income

South Dakota has no income tax.

Property Taxes

In South Dakota, residents pay an average of $1,388 in taxes per $100,000 of assessed home value.

Tax breaks for seniors: A tax freeze and/or municipal property tax reduction is 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. Unmarried surviving spouses may also qualify for a freeze or reduction. Income is limited to $28,279 for individuals and $35,349 for multimember households. Single homeowners 66 and older who earn $12,490 or less can get a property tax refund based on income. Multi-person households headed by someone 66 or older, where the combined income is $16,910 or less, are also eligible. Refunds are only available for single-household dwellings, and you must have been a South Dakota resident for the entire previous year. People who do not receive a property tax refund and who do not own a home may apply for a refund of sales tax. South Dakota also has 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, which includes up to one acre, and must be paid along with 4% interest before the property can be transferred. For a single person, annual income must be less than $16,000. For a multimember household, the limit is $20,000.

Vehicle Taxes

4% excise tax is due when vehicle is titled.

Inheritance and Estate Taxes

None.

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