South Dakota State Tax Filing Guide (No Personal Income Tax)

1. What Is South Dakota State Tax Filing?

South Dakota state tax filing refers to compliance with business and transaction-based taxes administered by the South Dakota Department of Revenue . Importantly, South Dakota does not impose a personal state income tax on individuals.

South Dakota also does not impose a personal or corporate income tax. However, filing obligations may still apply for South Dakota-based business activity, including sales and use tax, contractor’s excise tax, bank franchise tax, and other transaction-based taxes. This is separate from federal income tax filing with the IRS.

2. Who Must File South Dakota State Taxes?

Most individuals do not need to file a South Dakota state income tax return because South Dakota does not impose a personal state income tax on residents, part-year residents, or nonresidents.

However, filing and reporting obligations may still apply for businesses or industry-specific activities conducted in South Dakota. These requirements relate to transaction-based or special business taxes, not personal income tax.

Common situations where South Dakota tax filing is required

1. Businesses with South Dakota nexus that are required to collect or remit sales and use tax
2. Contractors performing taxable construction services subject to South Dakota contractor’s excise tax
3. Financial institutions subject to the South Dakota bank franchise tax
4. Tourism or lodging-related businesses required to file tourism or municipal taxes
5. Businesses registered with the South Dakota Department of Revenue that must file periodic returns, even if no tax is due (zero-activity filings)

3. South Dakota Tax Forms – What to File

South Dakota does not require individuals to file a personal state income tax return. There are no standard South Dakota individual income tax forms for most taxpayers.

When South Dakota tax forms are required

1. No individual income tax return is required
2. Sales and Use Tax returns for businesses with taxable sales
3. Contractor’s Excise Tax returns for construction services
4. Bank Franchise Tax returns for qualifying financial institutions

Most people moving to or living in South Dakota enjoy the benefit of no state income tax. Confirming whether you have any South Dakota-source income early avoids surprises.

4. Documents Required for South Dakota Tax Filing (When Applicable)

If you determine you need to file with South Dakota, prepare these documents in advance:

1. Sales records: invoices, receipts, taxable transactions
2. Federal tax return: for reference only
3. South Dakota sales tax reports
4. Construction contracts (for contractor’s excise tax)
5. Prior South Dakota filings, if registered previously

5. DIY vs Accountant vs Managed Filing

Non-US founders and remote business owners typically choose one of three approaches: DIY, hire an accountant, or use managed filing services.

What typically increases complexity?

1. South Dakota-source business activity (sales tax, contractor’s excise tax, bank franchise tax, tourism taxes)
2. Multi-state operations / apportionment questions
3. Pass-through entities with South Dakota activity

6. Step-by-Step: South Dakota State Tax Filing (When Required)

Step 1: Confirm whether you have a South Dakota filing requirement

Most individuals do not have a South Dakota filing obligation. Filing is generally required only if you operate a business with South Dakota-based taxable activity, such as sales tax or contractor’s excise tax.

Step 2: Ensure you have an IRS-issued EIN (for businesses)

Businesses required to file South Dakota taxes must have an Employer Identification Number (EIN) issued by the IRS. You can apply for an EIN directly through the IRS: IRS EIN application page .

Step 3: Gather federal and South Dakota-source documents

Collect your federal tax return for reference (IRS tax forms), along with South Dakota-specific records such as sales reports, invoices, construction contracts, or prior South Dakota filings.

Step 4: Register and identify the correct South Dakota tax type

Register with the South Dakota Department of Revenue for the applicable tax (sales and use tax, contractor’s excise tax, or other business taxes). Filing requirements depend on the specific tax type—not on personal income.

Step 5: Prepare and submit the required return

Returns are typically filed electronically using South Dakota’s online filing system or approved software. Filing frequency may be monthly, quarterly, or annual, depending on the tax.

Step 6: Pay any tax due and retain confirmation

Submit payment by the applicable deadline and keep copies of all filings and confirmations. Even registered businesses with no tax due may be required to submit zero-activity returns.

Step 7: Monitor ongoing federal and state compliance

Continue meeting federal tax obligations with the IRS (IRS business tax guidance) and track South Dakota-source activity throughout the year to avoid missed filings or penalties.

7. Tips to Avoid South Dakota Tax Notices

• Confirm whether you actually need to file (most individuals do not)
• Report South Dakota-source income correctly if applicable
• File by the applicable monthly, quarterly, or annual deadline for the specific tax
• Keep good records of income sources and apportionment
• Respond promptly to any South Dakota Department of Revenue correspondence

8. South Dakota Tax Costs, Penalties, and Filing Timelines

South Dakota is considered a low-tax state because it does not impose a personal or corporate income tax. However, businesses subject to transaction-based taxes must still comply with filing deadlines and payment rules.

9. Common Federal & South Dakota Tax Forms

South Dakota does not issue personal or corporate income tax forms. As a result, most individuals and many businesses will never file a South Dakota income tax return.

South Dakota tax forms (when applicable)

• No personal or corporate income tax forms are required
• Sales and Use Tax returns for businesses with taxable sales
• Contractor’s Excise Tax returns for qualifying construction and contracting services
• Bank Franchise Tax filings for eligible financial institutions
• Tourism, lodging, or municipal tax returns when applicable

10. Conclusion

South Dakota remains one of the few states with no personal state income tax, making it attractive for individuals and many businesses. However, specific filing obligations can still apply for South Dakota-based business activity or certain industries

Understanding your situation helps you stay compliant without unnecessary filings. FormLLC can help confirm your South Dakota tax obligations quickly and clearly.