Taxes

Taxes

South Dakota is business friendly when it comes to tax climate, coming in at an impressive #3 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. 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 7.28% 9.49% 10.25% 9.21% 7.83% 7.51%

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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2019 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 45 48 42 19 33 39
Kansas 28
34 21 31 15 20
Minnesota 43 42 46 27 25 31
Nebraska 24 28 26 9 9 40
North Dakota 17 23 20 32
14 6
South Dakota
3 1 1 33 39 28
Note: 1 is best, 50 is worst. Report shows tax systems as of October 2018
Source: Tax Foundation calculations.