How taxes work in South Dakota
Sales tax. South Dakota charges a 4.2% statewide sales tax, and counties, cities and special districts add their own on top — which is why the average combined rate of about 6.4% is the number that matters at the till. Groceries are taxed at the full sales tax rate. South Dakota taxes groceries at the full rate.
Property tax. At an average effective rate of about 1.09%, a $350,000 home in South Dakota carries roughly $3,815 a year in property tax before exemptions. That is near the middle of US states. Local assessors set actual bills, so verify with the county for any specific property.
Income tax. No state income tax. The state sales tax rate was temporarily cut to 4.2% (scheduled to return to 4.5% in 2027). Remember that 'no income tax' states fund services through other taxes — compare the full picture (sales, property) before assuming a move saves money.
Sales tax · average combined
Property tax · average effective
Chart: DailyFinance.tools · Rates are reviewed averages from our state tax dataset — your exact local rate may differ.
How South Dakota compares with similar states
The states closest to South Dakota on average combined sales tax. Property tax is the average effective rate; income tax shows the structure, not a single rate.
| State | Combined sales tax | Property tax | Income tax |
|---|---|---|---|
| South Dakota (this page) | 6.4% | 1.09% | None |
| West Virginia | 6.5% | 0.59% | Progressive |
| Connecticut | 6.35% | 1.63% | Progressive |
| Pennsylvania | 6.34% | 1.49% | Flat |
| Massachusetts | 6.25% | 1.14% | Flat |
| All-state average (51 entries) | 6.61% | 1.04% | — |
What this means for your money in South Dakota
South Dakota does not tax wages, but the revenue is recovered elsewhere. Property tax is the main lever: at an average effective rate of 1.09% (rank 19 of 51, against an all-state average of 1.04%), a $400,000 home carries about $4,360 a year — collected monthly through mortgage escrow, so it shows up as a higher monthly payment rather than an annual bill. Renters feel it indirectly through rent.
Read together: South Dakota combines an average combined sales tax of 6.4% (rank 32 of 51), an average effective property tax of 1.09% (rank 19 of 51) and no state tax on wages. A household comparing states should compare all three against its own pattern — a high earner who rents weighs the income tax most; a homeowner on a fixed income weighs the property tax most.
Major cities in South Dakota
Sioux Falls, Rapid City, Aberdeen, Brookings, Watertown. Combined sales-tax rates differ between these cities — sometimes by more than a full percentage point inside the same state — because county and city layers stack on the state base. The South Dakota sales tax guide breaks down the calculation and links the calculator where you can enter your exact local rate.
Calculators for South Dakota residents
- South Dakota Sales Tax Guide & Examples — what you actually pay, with worked amounts.
- Sales Tax & VAT Calculator — add or extract tax at any rate, including your exact South Dakota local rate.
- Mortgage Calculator — include South Dakota property tax in the monthly payment.
- Property Tax Calculator — estimate a specific property's bill.
- Self-Employment Tax Calculator — federal SE tax for South Dakota freelancers.