South Dakota Sales Tax Rate Explained
South Dakota's state sales tax is currently 4.2%, the product of a temporary cut from 4.5% that took effect in mid-2023. The lower rate is scheduled to snap back to 4.5% on July 1, 2027, unless lawmakers act. The Tax Foundation's midyear 2026 data adds an average local rate of 1.91%, for a typical combined rate of 6.11%.
The temporary nature of the cut makes South Dakota unusual. Shoppers are getting a modest break right now, but the rate has a built-in expiration date, and efforts to make the reduction permanent have stalled in the legislature.
What Is Taxed and What Is Exempt in South Dakota
South Dakota has one of the broadest tax bases in the country. Most tangible goods are taxed, many services are taxed too, and, unusually, groceries are taxed at the full state rate. A state that taxes both your haircut and your milk is taxing just about everything.
The grocery taxation stands out nationally. South Dakota is one of only a handful of states that taxes unprepared food at the full rate, which makes the weekly supermarket trip noticeably more expensive than in neighboring states. Prescription drugs are one of the few meaningful exemptions.
Example: A $1,000 Purchase in Sioux Falls
Sioux Falls has a combined rate of 6.2%, from the 4.2% state tax plus a 2% city tax. A $1,000 purchase works out to $1,000 times 0.062, which is $62.00 in tax, for a total of $1,062.00.
The grocery angle hits harder. A $200 weekly grocery run in Sioux Falls carries the same 6.2%, adding $12.40 in tax that shoppers in neighboring Minnesota or Nebraska would not pay at all. Over a year, that is more than $600 in tax on food alone.
Local Sales Taxes in South Dakota
South Dakota municipalities levy their own sales taxes, with Sioux Falls and Rapid City both adding 2% on top of the state rate. The Tax Foundation lists the maximum local add-on at 4.50%, though that figure reflects special situations rather than typical cities.
Because the state has no income tax, these local sales taxes carry real weight in funding city services. The municipal layer is not an afterthought here; it is a primary revenue tool.
Online Shopping and Marketplace Sales in South Dakota
South Dakota famously won the Supreme Court case that let states tax remote sellers, so its nexus enforcement is well established. Remote sellers and marketplace facilitators collect South Dakota tax once they cross economic nexus thresholds, with the rate following the delivery address.
Online grocery orders are taxed the same as in-store ones, at the full combined rate. There is no channel-based escape from the grocery tax; it follows the food wherever it is bought.
Does South Dakota Have a Sales Tax Holiday?
No. South Dakota has never offered a sales tax holiday, and the temporary rate reduction is the closest thing shoppers get to a break. With the rate already scheduled to rise back to 4.5% in 2027, a holiday is unlikely to appear.
The policy debate instead centers on groceries. Multiple bills to exempt food from the tax have failed, so for now South Dakota remains one of the few states where the supermarket receipt includes sales tax on every item.
Frequently Asked Questions
What is the South Dakota sales tax rate?
Currently 4.2% at the state level under a temporary cut, averaging 6.11% combined. The rate reverts to 4.5% on July 1, 2027. Sioux Falls is 6.2%.
Are groceries taxed in South Dakota?
Yes. South Dakota is one of the few states that taxes groceries at the full rate, with no exemption or reduced rate.
What is the sales tax in Sioux Falls?
Sioux Falls has a combined rate of 6.2%, from the 4.2% state tax plus a 2% city tax.
Is the South Dakota rate cut permanent?
No. The reduction from 4.5% to 4.2% expires July 1, 2027, and efforts to make it permanent have failed so far.
Does South Dakota have a sales tax holiday?
No. The state has never offered one.
Are services taxed in South Dakota?
Many are. South Dakota taxes a broad range of services in addition to goods, giving it one of the widest tax bases in the country.
Related Calculators
See the national picture on the main Sales Tax Calculator, or compare the plains on our North Dakota, Nebraska, and Montana pages. For paycheck math in a no-income-tax state, try the South Dakota Paycheck Calculator.
Sources: Tax Foundation, State and Local Sales Tax Rates, Midyear 2026. Figures reviewed for 2026. This calculator provides an estimate for planning purposes and is not tax advice, confirm your exact rate with the South Dakota Department of Revenue.