Capital Gains Tax for South Dakota (2026)
South Dakota (SD) Key Facts
State Capital Gains Rate
0%
Taxed As
Not taxed at state level
Federal Rate Applies
Yes (0%, 15%, or 20%)
Long Term vs Short Term
No state tax on either
How This Calculator Works in South Dakota
This calculator estimates your combined federal and South Dakota capital gains tax. Enter your gain amount, holding period, and income to see your estimated tax.
South Dakota Overview
South Dakota has no state capital gains tax. South Dakota is also popular for trusts due to favorable asset protection laws. Investors only owe federal capital gains tax, which ranges from 0% to 20% for long-term gains plus a potential 3.8% Net Investment Income Tax for high earners.
How South Dakota Compares
South Dakota's capital gains rate of 0% compares to North Dakota at 1.95% and Minnesota at 9.85%. No state capital gains tax provides a clear advantage for investors.
| State | Top Rate | Notes |
|---|---|---|
| North Dakota | 1.95% | North Dakota has a capital gains rate of 1.95%. |
| Minnesota | 9.85% | Minnesota has a capital gains rate of 9.85%. |
| Nebraska | 5.84% | Nebraska has a capital gains rate of 5.84%. |
South Dakota's capital gains rate of 0% compares to a national average of approximately 5.04%. This is below the national average.
Tips for South Dakota Residents
- 1South Dakota has no state capital gains tax, so you only pay federal rates on investment gains.
- 2Federal long-term capital gains rates are 0%, 15%, or 20% depending on income, plus a potential 3.8% Net Investment Income Tax (NIIT).
- 3Hold investments for over one year to qualify for the lower federal long-term rates instead of ordinary income rates.
- 4Tax-loss harvesting—selling losing investments to offset gains—can reduce your federal capital gains tax bill.
- 5South Dakota's zero state rate makes it one of the most favorable states for investors and retirees with investment income.