Side-by-side tax comparison between Minnesota (9.85% top rate, graduated) and South Dakota (no income tax). See which state lets you keep more at every salary level, and how cost of living changes the picture.
South Dakota has no state income tax, while Minnesota uses a graduated system with rates of 5.35-9.85%. On a $100K salary, this creates a state tax difference of $6,402/year that South Dakota residents simply don’t pay.
Minnesota’s graduated brackets mean the gap between these two states widens at higher salaries. At $200K, the state tax difference grows to $12,805/year, while at $50K it’s only $3,201.
South Dakota wins at 10 out of 10 salary levels tested. The advantage is consistent and significant across the income spectrum.
| Salary | Minnesota | South Dakota | Difference | Winner |
|---|---|---|---|---|
| $40K | $31,759 | $34,320 | +$2,561 | South Dakota |
| $50K | $39,154 | $42,355 | +$3,201 | South Dakota |
| $60K | $46,549 | $50,390 | +$3,842 | South Dakota |
| $75K | $56,736 | $61,538 | +$4,802 | South Dakota |
| $100K | $72,723 | $79,125 | +$6,403 | South Dakota |
| $120K | $85,512 | $93,195 | +$7,683 | South Dakota |
| $150K | $104,147 | $113,751 | +$9,604 | South Dakota |
| $200K | $136,082 | $148,887 | +$12,805 | South Dakota |
| $250K | $167,258 | $183,264 | +$16,006 | South Dakota |
| $300K | $196,121 | $215,329 | +$19,208 | South Dakota |
Take-home pay only tells part of the story. Minnesota has a cost of living index of 99 while South Dakota is at 92 (national average = 100).
The cost of living gap is moderate. After adjustment, $100K has purchasing power of $73,457 in Minnesota vs $86,005 in South Dakota. The take-home winner also wins on purchasing power.
For a single earner at $100K filing jointly, take-home becomes $78,308 in Minnesota and $84,710 in South Dakota \u2014 a difference of $6,403. The gap remains similar regardless of filing status.
On paper, moving from Minnesota to South Dakota would save $6,403/year on a $100K salary, or $32,013 over 5 years. But relocation involves real costs: moving expenses, potentially buying/selling a home, changing jobs, and adjusting to a new community.
With an annual savings of $6,403, the tax difference alone is significant enough to justify a move for many people — especially if career opportunities are comparable. At higher salaries, the savings grow even larger: a $200K earner would save $12,805/year.