What South Dakota does and doesn't tax
South Dakota does not tax wages, salaries, tips, interest, dividends, pensions or Social Security, and it has no state income tax withholding. South Dakota levies no personal income tax.
Federal income tax still applies in full — the 2026 federal brackets run from 10% to 37% — and Social Security (6.2%) and Medicare (1.45%) come out of every paycheck. If you earn wages in a state that taxes income, for example by commuting across a border, that state can tax the wages earned there.
Income tax you avoid at common incomes
What a single filer would owe Minnesota, the nearby state with the highest tax at $75,000, compared with $0 in South Dakota:
| Income | South Dakota | Minnesota |
|---|---|---|
| $30,000 | $0 | $786 |
| $50,000 | $0 | $1,877 |
| $75,000 | $0 | $3,577 |
| $100,000 | $0 | $5,277 |
| $150,000 | $0 | $8,942 |
| $250,000 | $0 | $17,439 |
South Dakota compared with nearby states
At $75,000 (single), South Dakota ranks 43 (tied with 8 others) of 51 for state income tax, where 1 is the highest; 9 jurisdictions charge nothing at this income.
| State | Tax on $75,000 | Effective rate | Top rate |
|---|---|---|---|
| South Dakota | $0 | 0% | none |
| North Dakota | $182 | 0.24% | 2.5% |
| Minnesota | $3,577 | 4.77% | 9.85% |
| Iowa | $2,198 | 2.93% | 3.8% |
| Nebraska | $2,533 | 3.38% | 4.55% |
| Wyoming | $0 | 0% | none |
| Montana | $2,877 | 3.84% | 5.65% |
More about taxes in South Dakota
- South Dakota has no personal income tax and no general corporate income tax, so sales tax is the state's main source of revenue.
Frequently asked questions
Does South Dakota have a state income tax?
No. South Dakota levies no personal income tax. Wages, salaries, interest, dividends and retirement income are not taxed by the state.
How much does living in South Dakota save on income tax?
On $75,000 of income, a single filer pays $0 to South Dakota; 9 of 51 jurisdictions charge nothing at that income. Nearby, Minnesota would charge about $3,577.
Do I still pay federal income tax in South Dakota?
Yes. Federal income tax, Social Security and Medicare apply in every state. South Dakota residents who earn wages in a state that does tax income can also owe that state tax on those wages.
What other taxes do South Dakota residents pay?
South Dakota has no personal income tax and no general corporate income tax, so sales tax is the state's main source of revenue.
Estimates only — not tax advice. South Dakota figures: Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 (as of Jan. 1, 2026). Checked October 2026. Your return may include income, deductions and credits this estimate leaves out.