South Dakota Tax
South Dakota State Tax
South Dakota Income Tax
South Dakota is one of the seven states that do not levy income tax. The other six states are Alaska, Florida, Nevada, Texas, Washington, and Wyoming. It is currently ranked 48th in terms of the percentage of state and local taxes in the annual income of its taxpayers. The low tax burden makes South Dakota attractive for citizens and corporations alike.
South Dakota Sales Tax
State sales tax rate in South Dakota is 4%. Business owners charge an additional 4% for each item they sell. Counties and municipalities impose additional local sales tax to up to 2%, making the total possible tax rate go up to 6%. Sales tax collections must be paid to the Department of Revenue monthly or quarterly.
Taxable items include all tangible goods for sale. Restaurant meals, alcohol, hotel accommodations, and properties for rent are subject to gross receipts taxes. Unlike most states, groceries and prescription drugs are not exempted from sales tax. Tourism related businesses may charge up to 1.5% additional sales tax during peak seasons.
The federal, state, and local governments are exempt from paying sales tax in South Dakota. The state also exempts legitimate religious, educational, and charitable organizations, as well as ethnic governments and foreign embassies as long as they have an exemption permit issued by the Department of Revenue.
South Dakota Property Tax
Tangible properties are subject to property tax in South Dakota. Local governments collect approximately 1.28% of an assessed property’s fair market value. Total property tax collections make up 2.88% of the yearly income of the South Dakota residents.