Not sure exactly how this makes South Dakota a tax haven. A SD-based trustee must still file U.S. federal income tax returns, report the income, and report foreign beneficiaries (and also do tax withholding on amounts that are attributable to foreign beneficiaries). If the foreign beneficiaries are from a country that has a comprehensive income tax treaty with the U.S., or has a tax assistance agreement, that information will then be provided to the foreign beneficiaries' home country upon request.