{"id":376343,"date":"2016-03-31T21:36:45","date_gmt":"2016-04-01T02:36:45","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/state\/south-dakota-law\/south-dakota-personal-income-tax-laws.html"},"modified":"2016-06-20T19:51:12","modified_gmt":"2016-06-21T00:51:12","slug":"south-dakota-personal-income-tax-laws","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/state\/south-dakota-law\/south-dakota-personal-income-tax-laws.html","title":{"rendered":"South Dakota Personal Income Tax Laws"},"content":{"rendered":"\n
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South Dakota Personal Income Tax Laws<\/h1>\n
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Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last updated\n

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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Personal income tax is a government tax on individuals that varies based on their taxable income. Generally, taxable income is determined by taking a person\u2019s total income and applying deductions. Depending on the circumstances, credits may also be available to individuals.<\/p>\n

Many states levy a personal income tax<\/a> in addition to the federal personal income taxes collected by the Internal Revenue Service. Several states, however, including South Dakota, do not collect personal income tax. This article addresses other relevant taxes in South Dakota.<\/p>\n

South Dakota and Corporate Taxes<\/h2>\n

South Dakota does not collect a corporate income tax<\/a>, nor a personal income tax. In fact, South Dakota is arguably the most income tax-friendly state in the country.<\/p>\n

Bank Franchise Tax<\/h2>\n

The one important exception to the general absence of major business taxes in South Dakota is the state\u2019s bank franchise tax<\/a>, which applies to various financial institutions. The tax is based on the institution\u2019s net income, and is assessed at a series of progressively lower marginal rates ranging from 6 percent on income of $400 million or less down to 0.25 percent on income over $1.2 billion.<\/p>\n

Federal Taxes<\/h2>\n

As noted above, just because South Dakota does not charge personal income taxes does not mean state citizens get out of paying taxes altogether. You may also be subject to state consumer tax laws<\/a> and federal tax laws<\/a> .<\/p>\n

Under basic tax law<\/a>, states and the federal government are permitted to tax both earned and unearned personal income. Earned income is comprised of your salary from work, including wages, tips, commissions, and bonuses. On the other hand, unearned income comes from non-employment sources like interest, dividends, and profits from asset sales, royalties, and gambling winnings.<\/p>\n

Tax Forms<\/h2>\n

The Internal Revenue Service (IRS) implements federal income taxes nationwide. You can find most IRS forms and publications<\/a> online. And along with South Dakota’s consumer taxes, there may be other tax obligations you must meet in-state. You can find many state tax forms<\/a> online along with resources regarding taxpayer assistance programs<\/a> if you would like assistance with state or federal taxes.<\/p>\n

The highlights of South Dakota personal tax laws are listed in the following chart. See FindLaw’s Tax Law<\/a> section for more articles and resources.<\/p>\n\n
Code Section<\/td>\nNo personal income tax<\/td>\n<\/tr>
Who is Required to File<\/td>\nN\/A<\/td>\n<\/tr>
Rate<\/td>\nN\/A<\/td>\n<\/tr>
Federal Income Tax Deductible<\/td>\nN\/A<\/td>\n<\/tr>
Federal Income Tax Used as Basis<\/td>\nN\/A<\/td>\n<\/tr><\/tbody><\/table>\n

Note: State laws are constantly changing — contact a South Dakota tax attorney<\/a> or conduct your own legal research to verify the state law(s) you are researching.<\/i><\/p>\n

Research the Law:<\/h2>\n