An inheritance tax is a tax imposed on a person who inherits property from a deceased person. There is no federal inheritance tax, but some states have an inheritance tax.
In South Dakota, there is no state inheritance tax. This means that individuals who inherit property from someone who has passed away are not required to pay a state tax on the value of the inherited assets. While there is no federal inheritance tax, there is a federal estate tax; however, it only applies to very large estates. The estate tax is levied on the estate itself before the assets are distributed to the heirs. It's important for individuals dealing with inheritance to consult with an attorney to understand any potential tax implications, including federal estate taxes and any taxes that may be imposed by other states if the property is located outside of South Dakota.