2026 South Dakota State Income Tax
Effective 2026-04-28
South Dakota does not collect a state income tax on wages. There is no state W-4 to file, no state withholding line on your paystub, and no South Dakota state return for wage income at the end of the year. Federal income tax is your only paycheck-based tax obligation.
The 2026 South Dakota rate
0% (no state income tax)
Why South Dakota has no income tax
South Dakota's constitution (Article XI) caps state income tax at a 6% rate and South Dakota has not exercised that authority — there is no personal income tax. The state has also abolished its inheritance and estate taxes, which combined with the lack of income tax has made South Dakota a popular trust-domicile state for high-net-worth families.
South Dakota funds itself primarily from sales tax (4.2% statewide plus local option), the contractor's excise tax, and bank franchise tax. The state has no state-level corporate income tax either. For wage earners, your federal income tax is your only paycheck- based income-tax obligation.
What this means for your withholding
When you select South Dakota in the Breakeven calculator, the state row on your projection will show $0 owed and $0 withheld — you can't under-withhold for a tax that doesn't exist. Your federal projection covers your entire paycheck-based tax bill. The W-4 is the only payroll form you need to worry about.
How South Dakota compares to states with income tax
South Dakota funds its government through other sources: typically property taxes, sales taxes, severance taxes on natural resources, or specific industry levies. Total state and local tax burden in a no-income-tax state is not necessarily lower than in a state with an income tax; the mix is just different. For a take-home-pay comparison across states, model your federal projection in the calculator and compare it to federal brackets alone.
Sources
- South Dakota Department of Revenue — official income-tax landing page (or equivalent).
- Tax Foundation — State Income Tax Rates — cross-reference for the no-income-tax classification.
Note on state payroll surcharges. South Dakota does not collect statewide income tax, disability, or paid-leave premiums on wages. (Washington is the only no-income-tax state with statewide payroll programs the calculator currently models.) See the methodology for the full list of what is included and excluded.
Last cross-checked on 2026-04-28.
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Canonical reference: https://www.breakeven.tax/brackets/2026/south-dakota