Updated October 4, 2026. Quick answer: No. The Department of Revenue says South Dakota is “one of seven states that does not impose a state income tax”, so a sale of stocks, funds or real estate adds no South Dakota income tax. The page does not mention capital gains by name.
Selling your home? How the state taxes the profit, from its own tax documents: Does South Dakota tax the profit from selling your home?.
The same question for dividends and interest: does South Dakota tax dividends and interest.
How South Dakota treats capital gains
| Item | What the documents say |
|---|---|
| Treatment | Not taxed by the state |
| Where it is written | South Dakota Department of Revenue, individual taxes page |
| Short-term and long-term gains | No distinction: the state has no individual income tax |
A $50,000 long-term gain
A $50,000 long-term gain adds $0 of South Dakota income tax. Federal tax on the gain still applies.
What changes in 2026
The documents read print no 2026 change.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on gains in Topic no. 409, Capital Gains and Losses and Publication 550, Investment Income and Expenses.
Related: whether South Dakota taxes pensions, how South Dakota taxes retirement income, the capital gains tax by state table, and the federal capital gains tax calculator.
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Answer againSources
- South Dakota Department of Revenue: Individuals / Taxes page (Income Tax section): https://dor.sd.gov/individuals/taxes/
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.