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South Dakota Tax

Corporate Income Tax Forms

Form 1934 Sales and Use Tax Return 

Form 1933 Contractor Excise Tax Return

Sales Tax Forms

Form Sales and Use Tax Guide

Form E1350V8 Use Tax Form

Form E1934V7 Sales Return

Property Tax Forms

Form PT-38C Application for Property Tax Homestead Exemption

South Dakota’s tax burden, at 7.6% of income is well below the national average of 9.8%.  There is no individual state income tax.  There are however, excise and sales taxes.  There are also property taxes that must be given consideration.

South Dakota state sales – 4%, prescription drugs exempt, local sales tax can add 2.75%.  This is lower than most other states.

South Dakota personal income tax

There are no personal income taxes.

South Dakota excise taxes

Taxes will be assessed on alcohol, tobacco, gasoline and other miscellaneous items, at the discretion of the state.

– $1.53 per package of 20 cigarettes

– $3.93/gallon on spirits

– $.93 per gallon on table wine

– $.27 per gallon of beer

– There is an additional 2% wholesale tax on wines and spirits

– $.24/gallon on gasoline

South Dakota inheritance tax 

The inheritance tax was repealed by voters in 2001.  Estate tax is not collected as the federal government no longer provides a federal estate tax credit.

South Dakota payroll taxes

State Disability Insurance – none

State Unemployment Insurance – 0% to 10.33%, wage base is $11,000.  New employer contribution is 1.75%.  New construction employers use 6.55%.

State minimum wage follows federal standards

South Dakota state property tax

As South Dakota does not have personal income taxes, property taxes fund schools and local governments.  The state does not collect property taxes but will conduct assessments for taxation.

Properties are taxed by two or more of the following governments:

– Cities

– Counties

– Townships

– school districts

– water districts

– fire districts

– sanitary sewer districts

Local tax assessors assess properties for taxation and all but schools are capped in the amount they can tax per property.  Property is assessed for 85% of its market value.  The tax cap increases with changes in the consumer price index, as well as new construction on the house.  A county Board of Equalization will hear all complaints regarding assessed taxation.

South Dakota state corporate tax

There is no corporate tax rate in South Dakota.  Companies will be assessed for property taxes.

Exemptions

Needy residents (yearly income under 9,750 for single or $12,750 for household) that are 65 and older may be eligible for a sales tax refund.

Disabled veterans may receive a property tax exemption of up to $100,000 on the assessed value of their house.  The veteran must be totally disabled to receive this exemption

Single homeowners that are 66 or older can receive a refund of 35% of taxes paid if the combined household income is less than $13,250.

Disabled, social security and veteran’s benefits are generally exempt from taxation.

In an effort to stimulate business growth in South Dakota, South Dakota has the lowest business tax burden in the country. Average South Dakotans only spend 7.9% of their income of taxes. South Dakota ranks 20th in states with the lowest tax burden.

The state does not levy corporate or personal state income taxes. The state’s only form of direct taxation is the property tax; however, the state’s property taxes represent the median property tax rates in comparison to the other 49 states. Sales taxes are not levied by the state government. Instead, county governments legislate the sales tax rate. The highest sales tax in South Dakota is 6%. Only tangible property is taxable in South Dakota.

Corporate Taxes

South Dakota does not impose a corporate income tax on businesses headquartered within the state. South Dakota imposes a bank franchise tax and a bank card tax estimated at $87 per capita. Many corporations are choosing to move to Dakota because corporate taxes within the state are lower than most states.

Personal Income Taxes

South Dakota does not impose state personal income taxes.

Sales Taxes

South Dakota consumers pay general sales taxes as determined by the county. The State sales tax rate is 4%. Sales taxes also apply to services that are used instead of purchased. Pierre, the state capital, makes about $1,600 per resident in general and selective sales taxes. Gas sales taxes in South Dakota are imposed by the state government. The Gas tax rate currently stands at 24 cents per gallon. Cigarette Taxes are among the lowest in the county at $1.53 per pack. The State sales taxes were first implemented in 1933. Tobacco taxes were adopted in 1923. South Dakota taxes table wine at 93 cents per gallon and beer at 27 cents per gallon.

Businesses collect sales taxes and are obliged to send the revenue to the government. Lessees of motor vehicles pay 4.5% of the total receipts. In an effort to bolster tourism to the Mount Rushmore state, South Dakota imposes a 1% tax on tourism related services. Consumers who buy products on Indian reservations are exempt from paying South Dakota sales taxes. Indian Reservations collect their own sales taxes, give the revenue to Pierre and are reimbursed according to the state population ratio of Native Americans to non-Native Americans within a county.

Property Taxes 

Property taxes in South Dakota represent the median range of property taxes when compared to other states. The government’s coffers fill with approximately $1,000 of revenue from property owners. Property taxes are levied by the county governments. South Dakota is one of 13 states that do not levy property taxes at the state level.  If you need legal advice and assistance, contact South Dakota lawyers.


Introduction

Taxes are an inevitable part of our lives, and every state has its own set of tax laws. South Dakota is no exception to this rule. In this article, we are going to take a deep dive into the tax laws of South Dakota. We will provide you with all the important information you need to know, from the state income tax to property taxes and sales taxes.

South Dakota State Tax

South Dakota is one of the few states in the country that has no state income tax. In other words, you don’t have to pay state taxes on your income in South Dakota. This means that if you earn $50,000 per year, you get to keep the entire $50,000.

However, this doesn’t mean that South Dakota doesn’t collect any taxes. Although there is no state income tax, there are still other taxes that you need to pay in the state, such as property tax, sales tax, and vehicle registration fees.

Property Tax

Property tax is a tax on the value of your property, including your home, land, and any other real property you may own. The property tax rate in South Dakota varies depending on the county you live in. The state sets a general levy rate of 6%, but the counties can set their own rates on top of this.

As of 2021, the average property tax rate in South Dakota is 1.28% of the assessed value of your property. This means that if your home is assessed at $200,000, you would have to pay roughly $2,560 in property taxes per year.

Sales Tax

Sales tax is a tax on the purchase of goods and services. In South Dakota, the sales tax rate is 4.5%. Additionally, some cities and towns in South Dakota also charge a municipal sales tax on top of the state sales tax.

As of 2021, the average sales tax rate in South Dakota is 6.40%. For example, if you buy a car in Rapid City, which has a municipal sales tax rate of 2%, you would have to pay a total sales tax of 6.5% (4.5% state tax + 2% municipal tax) on the purchase.

Vehicle Registration Fees

If you own a vehicle in South Dakota, you are required to register it with the state. The registration fee is based on the age and weight of your vehicle. The fee for a passenger car or light truck (under 10,000 pounds) is $34.20, with an additional $15.00 fee for each year of registration.

If your vehicle weighs more than 10,000 pounds, the fee will be higher. For example, the fee for a vehicle weighing between 10,001 and 16,000 pounds is $168.00 plus an additional $20.00 fee for each year of registration.

Tax Credits and Deductions

While South Dakota does not have any state income tax, there are still tax credits and deductions that you may be eligible for. Here are some of the most common tax credits and deductions available in South Dakota:

1. Property Tax Refund: If you are a homeowner and paid property taxes in the state, you may be eligible for a property tax refund. The refund is based on your income and the amount of property taxes you paid.

2. Sales Tax Refund: If you are a resident of South Dakota and purchased goods or services outside of the state, you may be eligible for a sales tax refund. You can claim a refund for up to 4% of the sales price of the goods or services you purchased.

3. Earned Income Tax Credit: The Earned Income Tax Credit (EITC) is a federal tax credit for low and moderate-income taxpayers. South Dakota does not have a state EITC, but you may still be eligible for the federal credit.

4. Charitable Donations: If you donate money or goods to a qualified charitable organization in South Dakota, you may be able to claim a deduction on your federal income tax return.

Conclusion

In conclusion, South Dakota is a tax-friendly state for residents because it has no state income tax. However, residents still have to pay property taxes, sales tax, and vehicle registration fees. South Dakota also offers some tax credits and deductions for eligible taxpayers. It’s important to understand all the tax laws in the state to avoid any surprises and properly plan your finances. If you have any questions or concerns about taxes in South Dakota, it’s always best to consult a tax professional.