Compare state tax rates and rules — on income, ordinary purchases, gas, sin products, property, and more — across the U.S. 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 Most Tax-Friendly Sure, it’s cold in the winter. But low taxes will offset some of the cost of staying warm. South Dakota has no income tax, and combined state and local sales taxes are below average for the U.S. The Mount Rushmore State is one of Kiplinger's top ten most tax-friendly states 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. Motor Fuel Taxes Gasoline: $0.3000 per gallon. Diesel: $0.3000 per gallon. Property Taxes In South Dakota, residents pay an average of $1,388 in taxes per $100,000 of assessed home value. Vehicle Taxes 4% excise tax is due when vehicle is titled. Sin Taxes Cigarettes and little cigars: $1.53 per packOther tobacco products: 35% of the wholesale priceBeer and other malt beverages: $0.27 per gallonWine: $1.31 per gallon Liquor: $4.67 per gallon Taxes On Wireless Service 14.22% Inheritance and Estate Taxes None. About our methodology