No State Individual Income Tax
South Dakota has no state individual income tax, so all military retirement pay and VA compensation are state-tax-free.
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Apply directly through the official South Dakota agency.
About this benefit
Eligibility
All South Dakota residents. South Dakota does not levy a state individual income tax, which means all military retirement pay, VA disability compensation, and other income is state-tax-free.
Estimated value
Varies by income; a retiree receiving $30,000/year saves $1,000-$2,000+ compared to states with income tax.
How to apply
Automatic for all SD residents.
Verified against official source
Last checked 2026-05-06 against vetaffairs.sd.gov. Always confirm current rates and rules with the South Dakota state agency before applying.
Other South Dakota Tax Benefits
Motor Vehicle Excise Tax Exemption (Disabled Veterans)
Exemption from 4% excise tax on the purchase of one motor vehicle for qualifying disabled veterans.
~$1,200 on a $30,000 vehicle
Disabled Veteran Property Tax Exemption (100% P&T)
Exempts $200,000 of the home's full and true value from property taxes for permanently and totally disabled veterans.
$200,000 property tax exemption
Paraplegic Veteran Full Property Tax Exemption
Complete property tax exemption on the residence (up to one acre) for paraplegic veterans with wheelchair-adapted homes.
Full property tax exemption
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