South Dakota Veteran Tax Exemptions 2026

Living in South Dakota already puts you ahead on taxes: the state collects no income tax at all, so your VA disability pay is never touched by state tax of any kind. That alone is worth knowing, but South Dakota goes further with a full property tax exemption for veterans who reach the qualifying rating. Two solid benefits, one straightforward process, and this page walks you through both.

Does South Dakota tax VA disability income?

South Dakota has no state income tax of any kind, so the question is moot in the best possible way: the state cannot tax your VA disability pay because it does not tax income at all. Your monthly VA compensation lands in your account untouched by South Dakota.

South Dakota property tax exemption for disabled veterans

Full exemption at 100% P&T. No state income tax. 100% P&T means a full property tax exemption.

South Dakota is one of the cleaner combinations in the country for disabled veterans: no income tax and a full property tax exemption once you hit the top rating, which can wipe the property tax line off your budget completely.

What rating do you need in South Dakota?

The size of your break depends on your combined VA rating. In South Dakota, the full break is reserved for veterans at the top rating, usually 100 percent or 100 percent Permanent and Total. Lower ratings may still qualify for a smaller break, so it is worth checking with your county even if you are not yet at 100 percent. Not sure what your combined rating works out to? Run it through our VA disability calculator first, and if you are aiming for the top tier, check whether you qualify for Permanent and Total status.

How to claim your South Dakota exemption

1. Confirm your current combined rating and whether it is Permanent and Total. Your VA award letter shows both.
2. Gather your DD-214 and your VA disability award letter. Most South Dakota offices ask for both.
3. Contact your county tax assessor for the property tax exemption, and the your state tax agency or Department of Veterans Affairs for the income side.
4. File before your county deadline. Many counties require you to apply once, then renew only if your rating changes.

Always confirm the current figures and deadlines with your county assessor and the South Dakota Department of Veterans Affairs before you rely on them. Rules and dollar amounts change year to year.