South Dakota Capital Gains Tax (2026)
South Dakota has no personal income tax, so it does not tax capital gains at the state level. You still owe federal capital gains tax. Run your own numbers with the free capital gains tax calculator, which estimates federal, NIIT, and South Dakota tax together.
In short: federal long-term rates of 0%, 15%, or 20% apply everywhere. At the state level, South Dakota adds nothing for most sales.
How South Dakota treats capital gains
South Dakota has no personal income tax, so it does not tax capital gains at the state level. You still owe federal capital gains tax.
A worked example
Say you are a single filer in South Dakota with $60,000 of taxable income who sells stock held over a year for a $25,000 long-term gain. Federal tax on the gain is $3,750 (all of it lands in the 15% bracket at this income; no NIIT applies below $200,000 MAGI). South Dakota adds nothing, so the total stays $3,750, an effective 15.0% on the gain. These figures use the same math as the calculator, 2026 federal brackets per IRS Rev. Proc. 2025-32, and state figures from the Tax Foundation's State Individual Income Tax Rates and Brackets, 2026.
Frequently asked questions
Does South Dakota tax capital gains?
No. South Dakota has no personal income tax, so capital gains are not taxed at the state level. Federal capital gains tax still applies.
What will I pay on a long-term gain in South Dakota?
Federally, a long-term gain is taxed at 0%, 15%, or 20% depending on your taxable income, plus the 3.8% NIIT above $200,000 MAGI (single). In South Dakota that federal bill is the whole bill.
Do I still owe federal capital gains tax in South Dakota?
Yes. Federal capital gains tax (0%, 15%, or 20% long-term, ordinary rates short-term, plus the 3.8% NIIT for high earners) applies no matter your state. The free calculator estimates federal, NIIT, and South Dakota tax together.
More
- Every state's capital gains treatment
- Capital gains tax explained: short-term vs long-term
- Neighbors alphabetically: South Carolina · Tennessee
This page is general information, not tax, legal, or financial advice. Rates and rules can change and depend on your situation. Confirm details with a tax professional, the IRS, or your state's revenue department.
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