South Dakota State Tax
South Dakota’s tax burden, at 7.6% of income is well below the national average of 9.8%. There is no individual state income tax. There are however, excise and sales taxes. There are also property taxes that must be given consideration.
South Dakota state sales – 4%, prescription drugs exempt, local sales tax can add 2.75%. This is lower than most other states.
South Dakota personal income tax
There are no personal income taxes.
South Dakota excise taxes
Taxes will be assessed on alcohol, tobacco, gasoline and other miscellaneous items, at the discretion of the state.
- $1.53 per package of 20 cigarettes
- $3.93/gallon on spirits
- $.93 per gallon on table wine
- $.27 per gallon of beer
- There is an additional 2% wholesale tax on wines and spirits
- $.24/gallon on gasoline
South Dakota inheritance tax
The inheritance tax was repealed by voters in 2001. Estate tax is not collected as the federal government no longer provides a federal estate tax credit.
South Dakota payroll taxes
State Disability Insurance – none
State Unemployment Insurance – 0% to 10.33%, wage base is $11,000. New employer contribution is 1.75%. New construction employers use 6.55%.
State minimum wage follows federal standards
South Dakota state property tax
As South Dakota does not have personal income taxes, property taxes fund schools and local governments. The state does not collect property taxes but will conduct assessments for taxation.
Properties are taxed by two or more of the following governments:
- Cities
- Counties
- Townships
- school districts
- water districts
- fire districts
- sanitary sewer districts
Local tax assessors assess properties for taxation and all but schools are capped in the amount they can tax per property. Property is assessed for 85% of its market value. The tax cap increases with changes in the consumer price index, as well as new construction on the house. A county Board of Equalization will hear all complaints regarding assessed taxation.
South Dakota state corporate tax
There is no corporate tax rate in South Dakota. Companies will be assessed for property taxes.
Exemptions
Needy residents (yearly income under 9,750 for single or $12,750 for household) that are 65 and older may be eligible for a sales tax refund.
Disabled veterans may receive a property tax exemption of up to $100,000 on the assessed value of their house. The veteran must be totally disabled to receive this exemption
Single homeowners that are 66 or older can receive a refund of 35% of taxes paid if the combined household income is less than $13,250.
Disabled, social security and veteran’s benefits are generally exempt from taxation.
