A tax is a charge or levy of money made by a governmental entity (state, local, or federal) against a taxpayer—usually a U.S. citizen or a person living or working in the United States. There are many kinds of taxes, including income tax, capital-gains tax, property tax, franchise tax, gift tax, ad valorem tax, sales tax, use tax, inheritance tax, and estate tax.

In South Dakota, residents and businesses are subject to various types of taxes. However, it is notable that South Dakota is one of the few states that does not have a state income tax, meaning individuals and corporations do not pay state tax on their earnings. Capital gains are also not taxed at the state level due to the absence of an income tax. Property taxes are levied on real estate by local governments and are a significant source of revenue for local services. South Dakota imposes a state sales tax on the purchase of goods and services, with the option for local jurisdictions to add additional local sales taxes. The state does not impose an inheritance tax. While there is no estate tax at the state level, estates may still be subject to the federal estate tax if they exceed the federal exemption amount. Gift taxes are not imposed by the state, but federal gift tax rules apply to transfers of wealth during an individual's lifetime. Use tax applies to the use, storage, or consumption of goods in South Dakota when sales tax has not been paid. Lastly, businesses may be subject to franchise taxes, which are taxes on the privilege of doing business in the state, and ad valorem taxes, which are taxes based on the assessed value of an item, such as real estate or personal property.