South Dakota does not have a state personal income tax, pension tax, personal property tax, or an inheritance tax making it one of the lowest taxed states in the country. The state’s sales tax rate is 4.5% and cities in South Dakota have the option of collecting a local sales tax of up to 3%, but most major cities only collect an extra 2%.
Across the state, the average effective property tax rate is equally low at 1.22%. That said, South Dakota is one of three states that still taxes groceries at the full state sales tax rate.