A tax return is a form on which a person or entity reports income, deductions, and exemptions to the federal or state taxing authority (IRS or state tax authority), and on which the person or entity’s income tax liability is calculated.
In South Dakota, as in all states, taxpayers are required to file a tax return with the Internal Revenue Service (IRS) to report their income, deductions, and exemptions for federal tax purposes. This process determines the individual's or entity's federal income tax liability. However, South Dakota is one of the few states that does not have a state income tax for individuals. Therefore, residents and entities in South Dakota are not required to file a state tax return to report their income to a state tax authority for income tax purposes. They must still comply with other state taxes such as sales and property taxes and file any necessary returns for those taxes. Businesses operating in South Dakota may have to file returns for other types of taxes, such as corporate income taxes or taxes specific to certain industries.