South Dakota
Military Benefits

Military Pay and State Income Tax

South Dakota has no state income tax. All military pay, military retirement, and VA disability compensation are fully exempt.

South Dakota has no state income tax, making all military pay, military retirement, and VA disability compensation fully exempt by default. This is one of the primary financial reasons military members choose to establish South Dakota as their state of legal domicile. The state has very affordable housing, particularly in the Rapid City and Black Hills area surrounding Ellsworth AFB.

VA disability compensation is fully exempt from South Dakota state income tax. This is a federal-level exemption honored automatically. This applies to all ratings including partial disability compensation and Combat-Related Special Compensation (CRSC).

Under the Veterans Benefits and Transition Act of 2018, military spouses who maintain domicile in another state do not owe South Dakota income tax on wages earned in South Dakota while accompanying their servicemember on military orders. This applies regardless of how long the spouse has lived in South Dakota.

SBP annuity payments to surviving spouses are included in the military retirement exemption and are fully exempt from South Dakota income tax.

Property Tax Exemptions and Discounts

South Dakota provides a full property tax exemption for veterans rated 100% permanently and totally disabled by the VA. Additional partial exemptions may apply for veterans with lower disability ratings.

South Dakota veterans rated 100% P&T disabled receive a full property tax exemption on their primary residence. Veterans with lesser disability ratings may qualify for a partial exemption. The state also has very low property tax rates compared to national averages. Apply at your county director of equalization.

The surviving spouse of a 100% P&T disabled veteran in South Dakota retains the full property tax exemption as long as they remain unmarried and continue to occupy the property as their primary residence. The exemption passes automatically without the spouse needing to re-qualify with a new VA rating.

Active duty servicemembers stationed in South Dakota on military orders are not required to pay South Dakota personal property taxes on vehicles registered in their home state. SCRA protects home-state registration from challenge. If you register a vehicle in South Dakota, local personal property tax rules apply.

Vehicle Registration and Driver License

SCRA protects active duty servicemembers from being required to register vehicles in South Dakota while stationed here on orders. South Dakota also offers veteran-specific license plates and registration benefits for disabled veterans.

Active duty servicemembers are not required to register their vehicles in South Dakota while stationed here under SCRA. You may keep home-state plates and registration. South Dakota cannot require registration change based solely on military orders. Keep a copy of current orders in your vehicle at all times in case of a traffic stop.

Veterans with a 100% P&T disability rating may receive a vehicle registration fee waiver or significant reduction in South Dakota. Free specialty disabled veteran license plates are also available. Contact SD DMV Veterans Services to verify current eligibility and apply.

A South Dakota driver license for a servicemember or dependent stationed outside the state does not expire during active duty. The license remains valid for 90 days after separation or return to South Dakota. When you PCS back, you will have at least 60 days to renew before enforcement.

Military spouses may maintain their home state vehicle registration and driver license while residing in South Dakota due to military orders. They are not required to obtain a South Dakota license or plates. This applies regardless of how long they have lived in the state.

Military Spouse Employment and Licensing

South Dakota has enacted military spouse licensing reciprocity laws requiring expedited license transfers for qualified professionals. Military spouses may also maintain their home state domicile and vehicle registration regardless of time spent in South Dakota.

South Dakota Codified Laws 36-1-40 requires licensing boards to grant expedited temporary permits and full licenses to military spouses. South Dakota participates in the nurse licensure compact and several other professional licensure compacts. Military spouses may maintain their home state vehicle registration and driver's license while stationed in South Dakota.

South Dakota law allows a military spouse who voluntarily leaves employment to accompany their servicemember on a PCS move to collect unemployment benefits. They are not considered to have voluntarily quit without good cause. The spouse must have worked in South Dakota prior to the PCS move.

Military spouses of active duty servicemembers are eligible for non-competitive appointment to federal civil service positions under Executive Order 13473. This applies at any federal agency with a presence near South Dakota installations, including DoD civilians, VA, and other federal employers.

A military spouse who maintains domicile in another state and works remotely for an out-of-state employer while living in South Dakota on military orders may be exempt from South Dakota income tax on those remote wages. South Dakota-source income may still be taxable. Consult a military-aware CPA for your specific situation.

SCRA, Federal Protections That Apply in South Dakota

South Dakota courts and landlords are required to honor all federal SCRA protections. Your installation JAG office can provide free legal assistance for any SCRA issue including lease terminations, interest rate caps, and foreclosure stays.

You can terminate any South Dakota residential lease with 30 days written notice upon receiving PCS orders or a deployment of 90 or more days. Deliver written notice and a copy of orders to the landlord. Termination is effective 30 days after the next rent due date. South Dakota landlords cannot charge early termination fees to servicemembers exercising SCRA rights.

Any debt taken on before entering active duty, including mortgages, car loans, credit cards, and student loans, must be reduced to 6% interest upon written request. Submit written notice with a copy of orders to each lender. The cap applies retroactively, excess interest above 6% is forgiven, not deferred.

South Dakota courts cannot foreclose on a servicemember's primary residence during active duty without a court order. The protection extends for 1 year after separation. Contact your installation JAG immediately if you receive any foreclosure notice while on active duty.

South Dakota courts must grant at least a 90-day stay of civil proceedings when a servicemember cannot appear due to military duties. Courts cannot enter a default judgment against an active duty servicemember without a hearing and an attorney appointed to represent their interests.

Education Benefits in South Dakota

South Dakota provides in-state tuition for active duty families stationed in the state. Multiple Yellow Ribbon schools operate in South Dakota, covering tuition and fees beyond the GI Bill cap for eligible veterans at participating private and out-of-state schools.

Federal law and South Dakota policy grant immediate in-state tuition eligibility to active duty servicemembers stationed in South Dakota, their spouses, and dependents. No 12-month waiting period is required. This applies to all South Dakota public colleges and universities.

South Dakota has multiple Yellow Ribbon-participating schools that cover tuition and fees beyond the GI Bill state cap at no additional cost to the veteran. For veterans with 100% GI Bill eligibility, Yellow Ribbon schools eliminate out-of-pocket tuition entirely. Verify current participation at benefits.va.gov/GIBILL before enrolling.

South Dakota National Guard members may receive state tuition assistance supplementing federal MGIB-SR benefits. The program can provide substantial tuition coverage at South Dakota public schools. Contact the South Dakota National Guard Education Office for current benefit amounts and eligibility.

Dependent children who establish domicile in South Dakota and begin enrollment at a South Dakota public university do not automatically lose in-state tuition eligibility if their active duty parent PCSes out of state, provided they maintain continuous enrollment.

Voting and Residency Rights

South Dakota must honor your right to maintain home-state domicile and vote by absentee ballot. Your installation Voting Assistance Officer can help you register and request a ballot under UOCAVA.

Being stationed in South Dakota does not change your legal domicile. You may continue to vote in your home state via absentee ballot under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA). Submit a Federal Post Card Application (FPCA) at FVAP.gov. Your installation Voting Assistance Officer (VAO) can assist.

If you want to vote in South Dakota and claim it as your home state, register at your county election office. Consider the financial implications of switching domicile, including South Dakota income tax rates and property tax rules, compared to your current home state.

Military spouses may independently maintain domicile in any state they choose under VBTA 2018. It does not have to match the servicemember's domicile. South Dakota cannot force a spouse to establish South Dakota domicile based on their physical presence in the state.

South Dakota accepts the Federal Post Card Application (FPCA) as a combined registration and absentee ballot request. UOCAVA voters may request electronic ballot transmission. Submit your FPCA at least 45 days before any election to ensure ballot delivery and return.