South Dakota Guide for Canadians

Quick Facts

State Income Tax	No state income tax
Sales Tax	4.2% state + local (average 6.11%)
Driver's License Grace Period	90 days for residents (30 days for CDL)
Residency Requirement for Tax	Intent to make South Dakota permanent home
Vehicle Registration Deadline	30 days after establishing residency
REAL ID Deadline	May 7, 2025 for domestic flights
Enhanced Driver's License	Not available

First 90 Days Checklist

Week 1-2: Essential Documents & Registration

• Register with USCIS if staying 30+ days (required by April 11, 2025)
• Gather required documents for driver's license
• Open US bank account
• Set up South Dakota mailing address

Week 3-4: Official Registration

• Apply for South Dakota driver's license (within 90 days)
• Complete knowledge and skills tests
• Begin vehicle registration process (within 30 days)
• Register to vote (if eligible)

Month 2-3: Establishing Residency

• Update address with Canadian financial institutions
• Complete vehicle registration and titling
• Establish South Dakota ties and connections
• Research healthcare options and insurance

Driver's License & Vehicle Requirements

For Canadian Citizens

Required Documents:

• Original valid Canadian passport (proof of legal presence)
• Social Security Number or letter of ineligibility
• Two proofs of South Dakota residential address (within 1 year)
• Birth certificate or citizenship documents for identity

Testing Requirements:

• Written knowledge test required for Canadian citizens
• Vision screening required
• Road skills test required - South Dakota does not recognize foreign licenses
• Canadian license will be returned after successful testing

REAL ID Option:

• Available for qualifying non-citizens with proper documentation
• Required for domestic air travel after May 7, 2025
• Enhanced Driver's License not available in South Dakota
• Passport required for international travel

Important Notes:

• 90-day limit to get South Dakota license after establishing residency
• 30-day limit for CDL holders
• REAL ID required by May 7, 2025 for air travel
• Must surrender out-of-state license upon South Dakota license issuance

Vehicle Registration

• Register within 30 days of establishing residency
• Must obtain title before registration
• 4% excise tax on vehicle value
• South Dakota insurance required for registration
• Annual registration renewal required

Tax & Residency Considerations

South Dakota State Tax Structure

• **No state income tax** on any income including wages, pensions, or investments
• **No inheritance tax** or estate tax
• **Low property taxes** (1.01% effective rate)
• **Low sales tax** 4.2% state + local (6.11% average)
• **No tax on retirement income** (no income tax at all)

Establishing South Dakota Tax Residency

South Dakota residency is primarily based on domicile and intent:

• Domiciled in South Dakota (intent to make permanent home)
• Obtaining South Dakota driver's license
• Registering to vote in South Dakota
• Maintaining permanent place of abode in South Dakota

Documentation to Establish Residency

• South Dakota driver's license and voter registration
• Bank accounts and utility bills in South Dakota
• Employment or business activities in South Dakota
• Professional licenses, club memberships
• Property ownership or long-term lease

Major Tax Advantage

South Dakota has no state income tax, making it one of the most tax-friendly states in the US. Combined with low property taxes and moderate sales taxes, it offers significant tax savings for Canadian residents seeking US residency.

US Federal Tax Implications for Canadians

Important: Under the Substantial Presence Test, you may be considered a U.S. resident for tax purposes.
New Requirement: Canadians staying 30+ days must register with USCIS by April 11, 2025.
Recommendation: Consult a cross-border tax professional.

Healthcare Considerations

Insurance Options

• South Dakota has not expanded Medicaid for non-citizens
• Travel insurance strongly recommended
• Consider US health insurance if staying permanently
• Quality medical facilities in Sioux Falls, Rapid City, Aberdeen

Prescription Medications

• Bring adequate supply from Canada
• Understand prescription transfer requirements
• US prices often higher than Canadian prices
• Research pharmacy options and discount programs

Special Considerations for Snowbirds

New US Registration Requirements (2025)

• Canadians staying 30+ days must register with USCIS
• Registration required by April 11, 2025
• Print and carry latest I-94 as proof of legal entry
• Failure to register may affect future US travel

Maintaining Canadian Ties

• Keep principal residence in Canada
• Monitor days in U.S. for tax reasons (183-day rule)
• Maintain Canadian insurance & banking relationships
• South Dakota domicile-based residency requires careful planning

Property Considerations

• Very affordable property values throughout the state
• Low property tax rates (1.01% effective)
• Various local tax exemptions available
• Impact on Canada's principal residence exemption

Climate & Lifestyle Factors

• Continental climate with hot summers, cold winters
• Lower population density with wide open spaces
• Very low cost of living compared to national averages
• Growing Canadian communities, especially in RV-friendly areas

Border Proximity Considerations

• No direct border with Canada - nearest crossing in North Dakota
• Enhanced Driver's License not available in South Dakota
• NEXUS/Global Entry beneficial for border crossings
• Consider proximity to Canadian services when choosing location

Travel Documentation

• Ensure passport validity (6+ months remaining)
• Consider Global Entry/NEXUS for easier border crossings
• Enhanced Driver's License not available in South Dakota
• I-94 registration now required for 30+ day stays

RV-Friendly State

South Dakota is extremely RV-friendly with special provisions for full-time RVers to establish residency. The state offers mail forwarding services and has become popular among Canadian snowbirds seeking tax advantages.

Key Contacts & Resources