Taxes & Incentives
Business friendly

Taxes & Incentives

South Dakota is business friendly when it comes to tax climate. South Dakota ranks 2nd in the nation on the Tax Foundation’s 2022 State Business Tax Index. With no corporate or personal income tax, 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 affordable property and unemployment insurance taxes.

Tax table

See how South Dakota compares to other states in the region

 

South Dakota Iowa Minnesota Nebraska North Dakota Wyoming
Sales Tax 4.5% 6.0% 6.88% 5.5% 5.0% 4.0%
Individual Income Tax 0.0% 8.53% 9.85% 6.84% 2.9% 0.0%
Corporate Income Tax 0.0% 9.80% 9.8% 7.81% 4.31% 0.0%

2022 State Business Tax Index Ranks

See how South Dakota ranks nationally

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Overall Rank Corporate Tax Rank Individual Income Tax Rank Sales Tax Rank Property Tax Rank Unemployment Insurance Tax Rank
Alabama 39 23 27 50 19 18
Alaska 3 28 1 5 24 43
Arizona 23 23 18 40 11 11
Arkansas 44 30 39 45 27 33
California 48 46 49 47 14 23
Colorado 20 6 14 38 34 41
Connecticut 47 27 47 23 50 22
Delaware 16 50 44 2 4 3
Florida 4 7 1 21 12 2
Georgia 32 8 35 33 25 37
Hawaii 41 19 46 28 30 29
Idaho 17 29 20 9 3 47
Illinois 36 42 13 39 48 40
Indiana 9 11 15 19 1 25
Iowa 38 38 38 15 39 34
Kansas 24 21 22 27 31 16
Kentucky 18 15 17 13 21 48
Louisiana 42 34 34 48 23 5
Maine 33 35 23 8 41 35
Maryland 46 33 45 26 43 46
Massachusetts 34 36 11 12 45 50
Michigan 12 20 12 10 21 7
Minnesota 45 45 43 29 32 30
Mississippi 30 13 25 32 38 6
Missouri 13 3 21 25 8 4
Montana 5 22 24 3 29 19
Nebraska 35 32 29 14 40 13
Nevada 7 25 5 44 5 45
New Hampshire 6 41 9 1 46 44
New Jersey 50 48 48 43 44 32
New Mexico 28 12 36 41 2 8
New York 49 24 50 42 47 36
North Carolina 11 4 16 20 13 12
North Dakota 19 9 26 30 10 9
Ohio 37 40 41 35 6 10
Oklahoma 26 10 30 37 28 1
Oregon 22 49 42 4 17 39
Pennsylvania 29 44 19 17 15 21
Rhode Island 40 37 31 24 42 49
South Carolina 31 5 33 31 36 27
South Dakota 2 1 1 34 18 38
Tennessee 8 26 6 46 33 20
Texas 14 47 7 36 37 14
Utah 10 14 10 22 7 17
Vermont 43 43 40 16 49 15
Virginia 25 16 32 11 26 42
Washington 15 39 7 49 20 24
West Virginia 21 18 28 18 9 26
Wisconsin 27 31 37 7 16 28
Wyoming 1 1 1 6 35 31
District of Columbia 48 25 48 37 50 39