South Dakota Mileage Deduction 2026

South Dakota has no state income tax. Your mileage deduction is federal-only, and there is no state return to file. At 15,000 business miles, you save about $4,056 in federal income and self-employment tax savings just by keeping a mileage log.

While there is no income tax, self-employed contractors in construction face a 2% Contractor's Excise Tax on gross receipts. This requires a separate tax license from the state. If you do construction-related work in South Dakota, factor this in, it applies to gross revenue, not net profit.

How to File

Deduct your business miles on federal Schedule C, Line 9 at 72.5¢/mile. No state return is required. Keep a log with the date, destination, purpose, and miles for each trip.

South Dakota does not require employers to reimburse mileage.

FAQ

Do I still need to track mileage if South Dakota has no income tax?

Yes. The deduction is on your federal return, which applies regardless of state taxes. Skipping the log means leaving $4,000+ on the table.

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