South Dakota ranked second-best on 2026 State Tax Competitiveness Index

South Dakota has been ranked No. 2 on the Tax Foundation’s 2026 State Tax Competitiveness Index.

The Index evaluates states’ tax competitiveness both overall and across various forms of taxes, including: individual income taxes, corporate taxes, sales and excise taxes, property and wealth taxes, and unemployment insurance taxes.

With no individual or corporate income tax, no personal property tax, and no inheritance tax, South Dakota’s second-best ranking illustrates the competitiveness of our tax climate for both individuals and businesses alike.

“The Tax Foundation’s State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare,” the executive summary accompanying the Index, said. “While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.”

Read more about the methodology and see how other states compared by clicking ‘read more’ below, or compare in this interactive map!