Minnesota vs South Dakota: Which State Keeps More Money in Your Pocket?
VSDetailed comparison of tax rates, cost of living, and quality of life
📌 Minnesota's 9.85% rate compared with South Dakota's no income tax translates to $7,388 difference annually for $75,000 professionals. South Dakota compensates with no income tax. corporate workers demographics lean South Dakota, but rural lovers sectors find Minnesota attractive despite higher tax burden.
Minnesota and South Dakota take different approaches to income tax—9.85% compared to no income tax. Run the math on $75,000, and you're looking at around $7,388 yearly variance. Of course, taxes are just one piece of the relocation puzzle.
🔑 Key Differences
- **State income tax**: Minnesota at 9.85% vs South Dakota at no income tax
- **Annual savings** (on $75,000): South Dakota saves you ~$7,388
- **Tax system**: Both use progressive brackets
- **Deductions**: Standard federal deductions apply, state variations exist
- **Local taxes**: Check your specific county/city as rates vary within states
Tax Comparison
| Tax Type | Minnesota | South Dakota |
|---|---|---|
| State Income Tax | 5.35% - 9.85% | No Income Tax Winner |
| 💰 On $40,000 Salary |
State Tax: $3,040
Take Home: $36,960
|
State Tax: $0
Take Home: $40,000
+$3,040
|
| 💰 On $60,000 Salary |
State Tax: $4,560
Take Home: $55,440
|
State Tax: $0
Take Home: $60,000
+$4,560
|
| 💰 On $100,000 Salary |
State Tax: $7,600
Take Home: $92,400
|
State Tax: $0
Take Home: $100,000
+$7,600
|
| Cost of Living | Minnesota offers moderate living costs that help offset higher taxes. Minneapolis-St. Paul provides metropolitan amenities with housing prices well below coastal markets - quality homes in good suburbs often sell for $300,000-400,000. Rochester and Duluth offer better value. Property taxes can be substantial, funding strong schools and services. Heating costs run high during severe winters. Groceries and services cost near national averages. Despite high state taxes, your net income typically provides comfortable lifestyle thanks to moderate housing costs and excellent public services that reduce other expenses. | South Dakota consistently ranks among America's most affordable states. Sioux Falls and Rapid City offer small-city amenities with housing costs dramatically below national averages. Quality homes typically sell for $200,000-300,000. Property taxes stay low. Groceries and services cost substantially less than national averages. The extreme affordability combined with no state income tax means even moderate salaries support comfortable lifestyles. |
Pros & Cons
Minnesota
✓ Advantages
- Strong job market in healthcare, retail, and technology
- Excellent quality of life and education
- Good public services funded by higher taxes
- Minneapolis-St. Paul offers urban amenities
- Strong sense of community
⚠ Considerations
- High state income tax (up to 9.85%)
- Very cold winters with heavy snow
- Higher cost of living than some neighboring states
- Property taxes can be substantial
- Sales tax reaches 7-8% in many areas
South Dakota
✓ Advantages
- No state income tax
- Very low cost of living
- No state estate tax
- Business-friendly
⚠ Considerations
- Cold winters
- Limited metro areas
- Lower average salaries
- Remote location
Bottom Line
On pure tax math, South Dakota comes out ahead by about $7,388 per year at $75,000 (no income tax versus 9.85%). Minnesota makes up ground through no income tax, which matters considerably to many people. The right choice depends on whether you prioritize direct savings or value what Minnesota offers in {factor} and overall lifestyle.📢 Share This Comparison
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