My husband and I are planning to file our federal return MFJ but I live, own a residence and work strictly in Minnesota. My husband lives and works strictly in South Dakota. If we file our federal taxes jointly do I need to file a state return in SD? Does he need to file a state return in MN?

Generally, you must file on your state return the same way you filed in the federal return.

In both state returns, you will report both incomes, but only the income earned in the respective state will be taxed. It probably will be taxed at a higher rate, but only in-state income is taxed.

Suggest you get professional help; the calculation can be rather tricky.