South Dakota Tax Guide
0%state income tax
South Dakota has no state income tax, making it one of the most tax-friendly states in America. The state also has no corporate income tax and no estate tax. South Dakota has become a popular destination for trust creation and financial privacy.
South Dakota Tax at a Glance
Income Tax
None
No state income tax
Sales Tax
4.5%
State-level rate
Property Tax
1.28%
16% above the national average
Estate Tax
No
No state estate tax
How South Dakota Compares to the National Average
Notable Tax Facts
- No state income tax — never had one
- No corporate income tax
- No estate or inheritance tax
- Has become a major trust and financial services hub due to favorable trust laws
- Balances the lack of income tax with sales tax, including on groceries
Get Glen’s Updates
Investing insights, new tools, and whatever I’m building this week. Free. No spam.
Unsubscribe anytime. I respect your inbox more than Congress respects property rights.
South Dakota Tax FAQ
Does South Dakota have income tax?
No. South Dakota has no state income tax on individuals and no corporate income tax. The state has never had a personal income tax.
How does South Dakota fund its government?
South Dakota relies on sales tax (4.5% state rate), property taxes, tourism taxes, and federal transfers. The state has consistently low spending compared to other states.
Why are so many trusts in South Dakota?
South Dakota has some of the most favorable trust laws in the nation, with no rule against perpetuities, strong asset protection, privacy provisions, and no income tax on trust income.
Is South Dakota good for retirees?
Very. No income tax means retirement income is completely untaxed. No estate tax adds to the appeal. Property taxes are moderate, and the overall cost of living is reasonable.
Compare With Other States
Other No-Income-Tax States
Recommended Resources
Tools & books I actually use and recommend
Interactive Brokers
Low commissions, global market access, and professional-grade tools. This is where I hold my positions.
Open an AccountThe Psychology of Money
Morgan Housel on why managing money is about behavior, not intelligence. Short, brilliant chapters you'll re-read.
View on AmazonA Random Walk Down Wall Street
Burton Malkiel's classic case for index investing. The book that convinced millions to stop stock-picking.
View on AmazonSome links above are affiliate links. I only recommend products I personally use. See my full disclosures.
Keep Exploring
Educational content, not tax advice. Tax rates are approximate and subject to change. Consult a qualified CPA or tax professional for advice specific to your situation. Data reflects widely-known public information as of early 2026.