Taxes

Taxes

South Dakota is business friendly when it comes to tax climate, coming in at an impressive #2 in the Tax Foundation´s 2018 State Business Tax Climate Index. With no corporate or personal income taxes, no inventory tax, no inheritance tax, no personal property tax, and low sales tax, you can´t get much friendlier than that. According to the Tax Foundation, every type of firm in South Dakota has a lighter tax burden than the national average: 33% lower for the average firm. Businesses also benefit from low property and unemployment insurance taxes.


Sioux Falls Development Foundation, South Dakota is ranked 2nd in the U.S. for tax climate.

South Dakota Iowa Minnesota Nebraska North Dakota Wyoming
Sales Tax 4.5%* 6.0% 6.875% 5.5% 5.0% 4.0%
Individual Income Tax 0.0% 8.98% 9.85% 6.84% 2.9% 0.0%
Corporate Income Tax 0.0% 12.0% 9.8% 7.81% 4.31% 0.0%
Tax Burden 7.2% 9.3% 10.4% 9.2% 8.7% 8.0%

Cost of Living: The Sioux Falls Advantage

The cost of living is better in Sioux Falls, thanks in part to no personal income tax, low real property and sales taxes, affordable housing and utility costs, and a favorable climate. The overall cost of living is 6% lower than the national average.

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2018 State Business Tax Climate Index Ranks and Component Tax Ranks

Overall Rank Corporate Tax Rank Individual Income Tax Rank Sales Tax Rank Unemployment Insurance Tax Rank Property Tax Rank
Iowa 40 48 33 19 34 39
Kansas 23
38 19 31 12 19
Minnesota 46 43 45 25 37 28
Nebraska 25 28 24 13 9 40
North Dakota 30 16 36 34
15 3
South Dakota
2 1 1 33 39 25
Note: 1 is best, 50 is worst. Report shows tax systems as of October 2017
Source: Tax Foundation calculations.