Minnesota vs South Dakota: Tax & Cost Comparison
2026Side-by-side Minnesota vs South Dakota comparison: state income tax, sales tax, property tax, cost of living, and minimum wage for 2026. Twin Cities metro vs Sioux Falls / Rapid City relocation — MN's 9.85% top against SD's no income tax. Common high-earner Twin Cities exodus.
Written and reviewed by Konstantin Iakovlev · Methodology · Updated
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
| Tax / Cost Factor | Minnesota | South Dakota |
|---|---|---|
| State income tax (top rate) | 9.85% (progressive) | None |
| State sales tax | 6.88% | 4.20% |
| Avg. effective property tax | 1.05% | 1.14% |
| Minimum wage (2026) | $11.41/hr | $11.85/hr |
| State Disability Insurance (SDI) | No | No |
| Paid Family Leave | Yes | No |
| Median home price (Q4 2025) | $340,000 | $295,000 |
| Foreclosure type | mixed | mixed |
| BEA Regional Price Parity (2024) | 96 | 92.4 |
| Median household income (2024) | $84,830 | $70,850 |
| Median 2-bedroom rent (Q4 2025) | $1,620/mo | $1,180/mo |
Worked example: $75,000 single filer, 2026
For a single filer earning $75,000 in 2026, the rough state-tax burden comparison:
- Minnesota: estimated state income tax ≈ $5,171, plus federal income tax (≈ $7,300 at 22% marginal), FICA $5,738, sales tax 6.88% on consumption.
- South Dakota: estimated state income tax $0 (no state income tax), plus federal $7,300, FICA $5,738, sales tax 4.20% on consumption.
Property tax depends entirely on home value. On a $400,000 home: Minnesota ≈ $$4,200/year; South Dakota ≈ $$4,560/year.
Why this comparison? Twin Cities metro vs Sioux Falls / Rapid City relocation — MN's 9.85% top against SD's no income tax. Common high-earner Twin Cities exodus.
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Minnesota
Frequently asked questions
Which is cheaper to live in: Minnesota or South Dakota?
By BEA Regional Price Parity (2024), Minnesota has a cost-of-living index of 96 and South Dakota is 92.4 (US average = 100). Median household income: Minnesota $84,830, South Dakota $70,850. Median 2-bedroom rent: Minnesota $1,620/mo, South Dakota $1,180/mo. South Dakota is the lower-cost state by this measure.
Does Minnesota or South Dakota have lower income tax in 2026?
South Dakota has no state income tax; Minnesota has a top rate of 9.85%. South Dakota is the clearly lower-income-tax state.
What about property taxes in Minnesota vs South Dakota?
Minnesota's average effective property tax rate is 1.05% (e.g., $4,200/year on a $400,000 home). South Dakota's rate is 1.14% ($4,560/year on $400K). Minnesota has the lower property tax burden.
Where is the minimum wage higher: Minnesota or South Dakota?
Minnesota's 2026 minimum wage is $11.13/hour; South Dakota's is $11.50/hour. South Dakota is higher.