South Dakota Cannabis Tax Rate
Under 10% TaxAdministering Agency: South Dakota Department of Revenue · Updated for 2026
6.2% – 6.2% Combined effective cannabis tax (excise + state sales + local)
Tax Breakdown
| Tax | Rate | Notes |
|---|---|---|
| State Cannabis Excise Tax | 0% | No state excise |
| State Sales Tax | 4.2% | Applies to medical and adult-use sales |
| Typical Local Sales Tax | 2% | Average — actual rate varies by city/county |
| Local Cannabis Business Tax | Up to 0% | City-level cannabis-specific tax where allowed |
Official source: South Dakota Department of Revenue ↗ · rates compiled 2026-08-11 · verify current rates at the source before filing.
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How Medical Cannabis Is Taxed
There is no cannabis-specific tax exemption for medical patients — medical and adult-use purchases are taxed the same.
South Dakota Cannabis Tax Notes
South Dakota medical cannabis is subject to state + local sales tax (no cannabis-specific excise).
City Cannabis Tax Rates in South Dakota
Cities in South Dakota can layer their own cannabis business tax on top of state taxes. Here are the reported rates for major cities:
| City | City Cannabis Tax | Total Effective Rate |
|---|---|---|
| No city-level cannabis business tax reported. | ||
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Frequently Asked Questions
What is the cannabis tax rate in South Dakota?
The combined effective cannabis tax in South Dakota ranges from 6.2% to 6.2% depending on the city. That includes a 0% state cannabis excise tax, 4.2% state sales tax, typical local sales tax, and any city cannabis business tax.
Does South Dakota exempt medical cannabis from tax?
There is no cannabis-specific tax exemption for medical patients — medical and adult-use purchases are taxed the same.
How much is the state cannabis excise tax in South Dakota?
South Dakota does not currently impose a state-level cannabis excise tax. Cannabis sales are subject to the 4.2% state sales tax where applicable.
Which agency administers cannabis tax in South Dakota?
Cannabis tax in South Dakota is administered by the South Dakota Department of Revenue. Licensed retailers file returns and remit taxes on a regular schedule.