South Dakota charges no state income tax on wages. Here is what that means for your paycheck, plus how it compares nationally.
Last updated: May 2026 · Data: state revenue departments, IRS, BLS
South Dakota is one of nine U.S. states with no state income tax on wages. There are no income tax brackets to report. South Dakota has no state income tax and no corporate income tax. The state relies on sales tax and tourism-related revenue. Combined with low property taxes, South Dakota is consistently ranked among the most tax-friendly states.
No state income tax is withheld from South Dakota paychecks. Workers keep more of every dollar than residents of states that tax income.
The nine states with no income tax on wages are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Because South Dakota has no state income tax, there is no state standard deduction to apply. You still claim the federal standard deduction on your federal return: $15,000 (single) or $30,000 (married filing jointly) for 2026.
| Benchmark | Top Marginal Rate |
|---|---|
| South Dakota (2026) | 0% |
| National average - all 50 states | 4.86% |
| National average - 41 states with an income tax | 5.93% |
| Highest in the U.S. (California) | 13.3% |
| Lowest among states that tax income | 2.5% |
| States with no income tax | 0% (9 states) |
South Dakota levies no income tax, placing it among the nine lowest-tax states in the nation for wage earners.
South Dakota has no state income tax, no corporate income tax, and no inheritance tax. It is a popular state for trust formation due to its favorable trust laws.
| South Dakota Tax Snapshot | 2026 |
|---|---|
| Top Income Tax Rate (2026) | 0% |
| Income Tax Structure | None |
| State Sales Tax | 4.2% |
| Minimum Wage | $11.50/hour |
| Median Household Income | $72,000 |
| Tax Agency | South Dakota Department of Revenue |
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See how nearby states tax income in 2026:
No. South Dakota is one of nine states with no state income tax on wages and salaries for 2026. South Dakota has no state income tax and no corporate income tax. The state relies on sales tax and tourism-related revenue. Combined with low property taxes, South Dakota is consistently ranked among the most tax-friendly states.
South Dakota has no state income tax, no corporate income tax, and no inheritance tax. It is a popular state for trust formation due to its favorable trust laws.
Yes. Residents of South Dakota still owe federal income tax and FICA (Social Security and Medicare) to the IRS. Only the state-level income tax is zero.
There is no state standard deduction because there is no state income tax. On your federal return you can still claim the 2026 federal standard deduction of $15,000 (single) or $30,000 (married filing jointly).
South Dakota is often considered tax-friendly because wage and salary income is not taxed at the state level. Consider sales tax, property tax, and cost of living for the full picture.
While the national average top income tax rate is 4.86% across all 50 states, South Dakota charges 0%. Only eight other states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming) also levy no wage income tax.