Cost of Living in South Dakota
Things cost about ▼ 11% less in South Dakota than the national average.
What Things Cost in South Dakota
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
South Dakota has no state income tax, no corporate income tax, and no inheritance tax, a trifecta that has made it increasingly popular with high-net-worth individuals and remote workers. Combined with a cost of living about 8% below the national average, the financial case is straightforward. Sioux Falls is the economic hub, a growing city with healthcare (Sanford Health, Avera) and financial services (Citibank's large operation) driving employment. Rapid City serves as the gateway to the Black Hills, Mount Rushmore, and Badlands National Park. The state is sparsely populated and politically conservative.
South Dakota at a Glance
Taxes in South Dakota
South Dakota has no state income tax. That's money in your pocket that residents of most other states don't keep. The combined sales tax averages 4.5%, which is relatively low. Property taxes run about 1.14% of home value, which on a $265,000 median home means roughly $3,021/year.
Cities in South Dakota
Ranked from least to most expensive. Index 100 = national average.
Explore South Dakota
FAQ About South Dakota
South Dakota's zero income tax applies to all types of income: wages, investment income, capital gains, retirement income, and trust distributions. The state also has favorable trust laws that attract wealth management and dynasty trusts. There is no inheritance or estate tax. For someone selling a business or with significant investment income, establishing residency in South Dakota can mean saving hundreds of thousands in annual taxes.
Sioux Falls offers a high quality of life for a city its size. The cost of living is below the national average, the healthcare industry provides stable employment, crime is low, and the city has been investing in parks, trails, and downtown amenities. The main drawbacks are cold winters, limited cultural and dining diversity compared to larger metros, and the geographic distance from other major cities.
Yes. South Dakota is one of a few states that charges the full sales tax rate on groceries. At a combined rate of about 6%, this adds a noticeable cost to everyday food purchases that most states exempt. For a family spending $800 per month on groceries, this amounts to roughly $48 per month or about $576 per year in grocery tax.