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 2021 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% 6.875% 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%

2021 State Business Tax Index Ranks

See how South Dakota ranks nationally

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