South Dakota Take-Home Pay Calculator (2026)

South Dakota has no state income tax. Workers pay no state-level tax on wages, salaries, tips, or self-employment income. The South Dakota constitution does not explicitly prohibit an income tax the way some other states' constitutions do, but the state has chosen not to impose one and has maintained that policy for well over a century.

The state funds its operations primarily through sales taxes and excise taxes. South Dakota's state sales tax rate is 4.2%, and municipalities add their own local rates. Combined, most South Dakota cities charge 6% to 7% in total sales tax. Rapid City and Sioux Falls both have combined rates around 6.5%. Relative to the national median, South Dakota's sales tax is moderate.

For workers considering a relocation, South Dakota compares favorably to its neighbors that do have income taxes. Minnesota's effective rate for a $70,000 earner is around 6% to 7%. Iowa is declining but still above 5%. Nebraska is at 5.84% top rate. North Dakota is very low at 2.5%. Workers choosing between a South Dakota job and a Minnesota or Iowa job at the same salary save $4,000 to $5,000 per year in state income tax.

South Dakota also has no personal property tax on most personal assets, no corporate income tax, and no inheritance tax. The state has positioned itself as a tax-friendly jurisdiction particularly for trusts and financial services, which is why a disproportionate number of trust companies and credit card companies are chartered there. For ordinary wage earners, the main benefit is simply no income tax withholding from each paycheck.