The Short Answer
No state income tax, so active-duty base pay is not taxed by South Dakota. Your base pay is set by the federal pay table — identical to every other state for your rank and years of service. What actually changes in South Dakota is your BAH (averaging $1,200/mo without dependents and $1,500/mo with dependents) and how South Dakota treats the taxable portion of your pay.
State tax status: ✓ TAX EXEMPT
2026 Worked Example — E-5, 6 Years, With Dependents in South Dakota
Here is how the math actually lands for a mid-career enlisted member stationed in South Dakota, built the way I read my own LES. Base pay and BAS are federal; the South Dakota BAH figure is the state average.
| Monthly line item | Amount | Taxable? |
|---|---|---|
| Base pay (E-5, over 6 yrs) | $3,874 | Yes (federal + state) |
| BAH with dependents (South Dakota avg) | $1,500 | No — tax-free |
| BAS (enlisted) | $476.95 | No — tax-free |
| Gross monthly entitlements | $5,850.95 | — |
| Taxable income (base pay only) | $3,874 | — |
| Est. South Dakota state income tax | $0 (no state income tax) | — |
Only the $3,874 of base pay is taxable — the $1,976.95 of BAH + BAS is completely tax-free. Run your exact rank, ZIP, and dependency status in the Military Pay Calculator for a precise estimate.
How South Dakota Taxes Each Type of Military Pay
Active-Duty Base Pay
No state income tax, so active-duty base pay is not taxed by South Dakota.
Guard & Reserve Drill Pay
No state income tax; Guard and Reserve drill pay is untaxed.
Military Retirement Pay
No state income tax; military retirement pay is not taxed.
VA Disability Compensation
VA disability compensation is tax-free federally and South Dakota has no income tax to apply.
SCRA & Residency in South Dakota
South Dakota is a popular SCRA domicile of choice for mobile servicemembers because it has no state income tax.
This is the single most misunderstood rule in military pay. Your home of record / state of legal residence — not your duty station — generally determines who can tax your military pay. Changing it is a deliberate act, not something that happens automatically when you PCS.
Major Military Installations in South Dakota
- Ellsworth Air Force Base
- South Dakota Army National Guard (Camp Rapid)
BAH is set by the Military Housing Area covering your duty ZIP. Verify your exact rate at the official DoD BAH lookup.
Official Sources
FAQ — Military Pay in South Dakota
Does South Dakota tax my military base pay?
No state income tax, so active-duty base pay is not taxed by South Dakota.
Is my BAH taxed in South Dakota?
No. BAH is federally tax-free and is never counted as income for South Dakota state income tax, regardless of how South Dakota treats base pay.
Does South Dakota tax military retirement pay?
No state income tax; military retirement pay is not taxed.
I'm stationed in South Dakota but my home of record is elsewhere — who taxes me?
South Dakota is a popular SCRA domicile of choice for mobile servicemembers because it has no state income tax.