State guide · SD
South Dakota sales tax and property tax
A temporary 4.2% rate with an end date, a tax that reaches services and groceries alike, and new sales tax money aimed at homeowners' bills.
Facts read on official South Dakota pages on · Checked by Radif Partners · How we calculate
- State sales tax
- 4.2%
- Local sales taxes
- Yes, by address
- Groceries
- Taxed, 4.2%
- Clothing
- Taxed like other goods
- Median property tax
- $2,940
- Effective property rate
- 1.02% · #18 of 51
South Dakota's state sales tax is 4.2% for now: the 2023 cut from 4.5% expires and the rate returns to 4.5% on July 1, 2027, with that extra 0.3% earmarked by SB 245 for owner-occupied property tax relief. Municipalities add up to 2% of their own, plus a gross receipts tax of up to 1% on restaurants, bars, lodging and admissions. The base is unusually wide. Food carries the full state rate, with only SNAP and WIC purchases exempt; clothing has no break; and services are taxed by default unless a statute exempts them, as it does for health services, education and financial services. Prescription drugs are exempt. There is no sales tax holiday. Property is taxed locally on 85% of market value, and the 2024 Census numbers read: a $2,940 median bill, a $289,600 median home, 1.02% effective, 18 of 51. A lower school levy for owner-occupied homes is the main break, and from 2027 counties may adopt a sales tax of up to 0.5% to shrink those bills further.
Total to pay
$104.20
Sales tax $4.20 · 4.2% of the price
| Price before tax | $100.00 |
| State tax · 4.2% | $4.20 |
| Local tax · 0% | $0.00 |
| Total | $104.20 |
Rule applied: general state rate. Exact local rate for an address: South Dakota rate lookup. How this is calculated.
Sales tax in South Dakota
Most states list the services they tax. South Dakota does the reverse: every sale of a service is taxable unless an exemption names it, and the exempt list covers health services, education, financial services and trucking among a few others. A $600 invoice for a taxable service owes $25.20 of state tax before any city share, which is why South Dakota businesses often see tax on bills that would be untaxed one state over. Remote sellers start collecting once their sales into the state pass $100,000 a year.
Groceries show the cost of the broad base. A $150 cart pays $6.30 to the state at 4.2%, and $9.30 in a city charging the full 2% municipal rate. When the state rate goes back to 4.5% on July 1, 2027, the state's share of that same cart becomes $6.75. Paying with SNAP or WIC benefits is the only way groceries escape the tax.
The local picture is about to widen. Today, only municipalities levy a general sales tax, capped at 2%, and many add the gross receipts tax on hospitality. SB 96 of 2026 lets counties adopt a sales and use tax of up to 0.5%, effective no earlier than January 1, 2027, on the condition that every dollar is credited against the county portion of owner-occupied tax bills. Vehicles pay a 4% motor vehicle excise tax instead of sales tax, and lodging, amusements and short car rentals add a 1.5% tourism tax. Use the state's address map for the city part, then enter it above.
What the state charges, item by item
| Item | State rate | Local tax | Rule |
|---|---|---|---|
| Most goods | 4.2% | yes | State sales and use tax rate of 4.2%, a temporary reduction from 4.5% (HB 1137, 2023). The tax applies to goods and to the sale of services unless specifically exempt. |
| Groceries (food for home) | 4.2% | yes | South Dakota has no general grocery exemption: food is taxed at the full state rate plus municipal tax. Only purchases made with SNAP (food stamps) or WIC are exempt. |
| Clothing | 4.2% | yes | No clothing exemption; clothing is taxed at the state rate plus municipal tax. |
| Prescription drugs | 0% | no | |
| Motor vehicles | 4% | Motor vehicle excise tax applies to the purchase of most motor vehicles instead of sales tax. | |
| Lodging, amusement and short-term vehicle rentals (tourism tax) | 1.5% | Tourism tax on top of sales tax; funds tourism promotion. | |
| Contractor's excise tax | 2% | On gross receipts of prime contractors for construction and realty improvement projects. | |
| Farm machinery and irrigation equipment (ag excise tax) | 4.2% | Excise tax on agricultural machinery used exclusively for farming. | |
| Wireless telecommunications gross receipts tax | 4% | On retail wireless communication services with a primary place of use in South Dakota. |
Scheduled by law: July 1, 2027: The 2023 rate cut sunsets: the state rate returns from 4.2% to 4.5%. SB 245 (2026) dedicates the extra 0.3% to owner-occupied property tax relief. (4.5%)source; January 1, 2027: Earliest date an optional county sales and use tax of up to 0.5% (SB 96, 2026) can take effect; revenue must reduce county property taxes on owner-occupied homes.source.
Local sales taxes
Levied by municipalities (municipal sales and use tax, plus a municipal gross receipts tax on alcohol, restaurants, lodging and admissions); from 2027 counties may opt into a sales tax of up to 0.5% under SB 96. Municipal sales and use tax capped at 2% (SDCL 10-52-2); municipal gross receipts tax up to 1% on top; optional county tax up to 0.5% (SB 96, 2026). Find the exact combined rate for an address with the official South Dakota lookup, then type the local part into the calculator above.
Sales tax holidays in 2026
South Dakota does not hold a sales tax holiday; the DOR's 2026 sales and use tax guide lists none.
Worth knowing about South Dakota sales tax
- South Dakota taxes services by default: sales tax applies to the sale of all services unless a specific exemption applies (health, education, financial services, trucking and others are exempt). source
- The 4.2% rate is temporary: SDCL 10-45-2 already carries the 4.5% text effective July 1, 2027. source
- Remote sellers with no physical presence must obtain a South Dakota sales tax license and collect once their gross revenue from sales into the state exceeds $100,000 in the current or previous calendar year (SDCL 10-64). source
- Restaurants, bars, hotels and venues can owe a municipal gross receipts tax of up to 1% in addition to the municipal sales tax. source
- Insulin for human use is exempt whether or not it is sold with a prescription. source
- Starting July 1, 2026, the sale of video lottery machines is subject to state and local sales tax. source
Property tax in South Dakota
The county director of equalization values every property at full and true value, then the taxable value is set at 85% of it. The Census median home of $289,600 is therefore taxed on about $246,160, and levies are expressed in dollars per thousand of that figure. The state neither collects nor spends a cent of the money; school districts, counties, cities and other districts share it. Taxes are paid a year in arrears, the first half by April 30 and the second by October 31.
The owner-occupied classification is the key form for a homeowner. There is no flat homestead deduction; classifying the home as a primary residence lowers the school general fund levy, and it must be filed with the director of equalization by March 15. What South Dakota calls its Homestead Exemption is something else: a deferral letting owners aged 70 or older postpone tax until the home is sold.
The Legislature has been working on the bill from several angles. SB 216 of 2025 holds growth in total owner-occupied valuation to 3% a year per county, and local property tax budgets to 3%, for five years, starting with taxes payable in 2027. SB 245 spends one-time money to cut the owner-occupied school levy on 2027 bills, then routes the July 2027 sales tax increase into permanent relief. Measured against the Census ratio of 1.02%, today's bill on a $320,000 home is roughly $3,248.
Property tax on a home in South Dakota
Typical bill per year
$2,939
| Per month | $245 |
| Median effective rate in South Dakota | 1.02% |
| Median bill paid | $2,940 |
Census median ratio; your county, city and school district set the real levy.
| Census figure | South Dakota |
|---|---|
| Median home value (owner-occupied) | $289,600 |
| Median real estate taxes paid | $2,940 |
| with a mortgage | $3,220 |
| without a mortgage | $2,581 |
| Effective rate (tax ÷ value) | 1.02% |
| Rank by effective rate (1 = highest) | 18 of 51 |
| Rank by median bill | 24 of 51 |
How the taxable value is set
Property is assessed at full and true (market) value by the county director of equalization, then equalized to 85% for taxation: a home worth $230,000 has a taxable value of $195,500. Levies are expressed in dollars per thousand of taxable value. Who levies the tax: local only (school districts, counties, municipalities and other districts); the state does not collect or spend property tax money
Payment calendar: Taxes are paid the year after assessment: the first half is delinquent on May 1 (pay by April 30) and the second half on November 1 (pay by October 31). Bills of $50 or less must be paid in full by April 30.
Other property tax relief
- Freeze on Assessments for Disabled and Senior Citizens. Owners aged 65+ or disabled who meet income limits can freeze the taxable value of their home. Apply to the county treasurer by April 1. source
- Homestead Exemption (tax deferral). Owners aged 70+ can delay payment of property taxes until the home is sold; taxes become a lien with interest. Deadline April 1. source
- Disabled Veteran Exemption. Veterans rated permanently and totally disabled from a service-connected disability: first $200,000 of value exempt. Deadline November 1. source
- Paraplegic Veteran Exemption. Exempts the home of a paraplegic veteran (or un-remarried surviving spouse) from all property taxes. source
Worth knowing about South Dakota property tax
- SB 216 (2025) caps the annual growth of total owner-occupied valuation at 3% per county and local property tax budgets at 3%, for five years; first seen on 2026 assessment notices, applied to taxes payable in 2027. source
- SB 245 (2026) uses one-time state money to lower the owner-occupied school levy on 2027 tax bills, then dedicates the 0.3% sales tax increase of July 2027 to ongoing homeowner relief. source
- SB 96 (2026) lets each county adopt a sales tax of up to 0.5% whose revenue appears as a credit on the county portion of owner-occupied tax bills. source
- Local taxing districts other than schools may raise property tax revenue only by CPI plus growth unless they 'opt out', a decision subject to local rules. source
- Renewable energy systems under 5 MW get a property tax exemption of 70% of assessed value or $50,000, whichever is greater. source