LLC Cost in South Dakota – How Much to Pay for an LLC


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Perhaps you are hoping to form a South Dakota LLC. People assume that starting an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in South Dakota.

South Dakota LLC Cost of Filing

Here are the costs involved in forming an LLC in South Dakota.

Cost of Filing Formation Certificates

The South Dakota Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the South Dakota Secretary of State

South Dakota Domestic LLC

  • Online Filing costs $150.
  • Annual Report filing costs $50
  • Name Reservation fee costs $25
  • By Mail: Fill out the application form, and send it to Secretary of State Office, 500 E Capitol Ave, Pierre, SD 57501. Costs $165.

South Dakota Foreign LLC

  • Online Filing costs $750.
  • Annual Report filing costs $50
  • Name Reservation fee costs $25
  • By Mail: Fill out the application form, and send it to Secretary of State Office, 500 E Capitol Ave, Pierre, SD 57501. Costs $765.

Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.

South Dakota LLC Formation Service or Registered Agent Fee

You need a registered agent to form an LLC in South Dakota, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.

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  • Operating Agreement Included

Business Permits and Licenses 

The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the South Dakota Department of Revenue for regulatory boards or agencies requiring licensing. 

Taxes payable to the South Dakota Department of Revenue

An LLC in South Dakota has to pay several State as well as Federal Taxes at the stage of formation & during its operation. Read this article to know more about these taxes. The South Dakota State Department of Revenue charges several taxes on an LLC. The two main State Taxes are:

State Income Tax

The state of South Dakota does not charge any State Income Tax on the earnings made by an LLC. Which means more savings on all the income you draw through your LLC.  

State Sales & Use Tax 

Every LLC which is a service provider or is a seller of tangible goods is bound to the sales & use tax in South Dakota. The LLC has to collect taxes & then pay those to the South Dakota Department of Revenue. The Sales & Use Tax is different in different regions, counties, & cities. The current state sales & use tax rate on LLC in South Dakota is 4.5%

Federal Self-Employment Tax

As the name suggests, Federal Self-Employment Tax is paid by all the LLC Business members or managers. This kind of tax applies to all the earnings a member withdraws from the business. 

The Federal self-employment tax rate in South Dakota is 15.3 percent. 

Federal Income Tax

The Federal Income Tax is calculated on the basis of the earnings, the income tax bracket your LLC falls, the deductions, & the manner/ mode of filing.

Federal Income Tax is levied on all the profits your LLC makes minus the deductions & allowances such as Healthcare or Retirement Plans.

Employee & Employer Taxes

If you have several employees who draw monthly salaries, there will be some added Employee-Employer taxes. These tax implications vary, depending on various factors, e.g., the amount, number of employees, etc.

Cost Comparison Between States

South Dakota is surrounded by many states, namely Nebraska, Wyoming, Montana, North Dakota, etc. Each of these states has a different rate of taxes levied on LLCs. Let us take a look at this comparative chart.

StatesFiling FeeAnnual/Biennial FeeSales Tax
South Dakota$150$504.5%
Nebraska$125Not required5.5%
Wyoming$102$504%
Montana$70$10None
North Dakota$135$505%

Based on the kind of industry you LLC operated in, your LLC will be liable to some other taxes & duties. For Example, if your LLC is in the sector of import & export, you have to pay the import-export duty. You should consult with a professional to verify the tax rates or business costs of registering an LLC in South Dakota.

Other Costs

How Much Does It Cost to Maintain an LLC in South Dakota

To maintain an LLC in South Dakota you will need to pay an annual fee of $50 along with state sales & use tax at 4.5% and federal taxes.

How much does it cost to maintain an LLC in South Dakota? The state’s fees are low when compared to other states. One of the first steps to start an LLC in South Dakota is to choose a name for the business. Make sure the name you’d like is available. After you’ve chosen a name, you’ll need to file an annual report to the secretary of state. The filing fee for the annual report is $50.

Annual reports, also known as periodic reports or statements of information, cost $50 in South Dakota. Failure to file these reports will incur a $50 late fee. Other recurring fees are required to file annual reports before your anniversary date. Filing online will cost $50, but filing on paper will cost an additional $55. The annual reporting fee should be incorporated into your yearly budget. This fee can add up quickly if you’re not prepared.

If you own an LLC in another state, you can file an Application for Registration of Name with the Secretary of State. This filing will cost $25. A foreign LLC can also file a DBA, a name different from the company’s official business name. A DBA will cost an additional $10 to register. An LLC will also need to file Articles of Organization (Articles of Organization) with the Secretary of State. This process can take a couple of weeks, depending on the circumstances.

Once your LLC has been registered in South Dakota, it will need a registered agent to receive legal mail on your behalf. A registered agent is an important part of any LLC, as they can remind you of important filing deadlines. In South Dakota, registering a foreign LLC requires you to file Articles of Organization with the State Office of State. If you’re foreign, you’ll also need to pay a $25 reservation fee to reserve the business name you’ve chosen.

In addition to paying the fees for the state’s office, you’ll need to open a business bank account for the company. This will make it easier to separate personal expenses from the business’s funds. Keeping detailed records of financial transactions is important for taxation purposes. You’ll also need to maintain information about the employees and contractors. The secretary of state can provide these documents at an additional cost, but the fees are typically worth the added security.

While most states charge fees for LLC registration, South Dakota requires a different fee for registering an agent. A registered agent accepts legal documents on behalf of the LLC and is required to be a resident of South Dakota or a South Dakota business entity. You can find a list of registered agents on the South Dakota Secretary of State’s website. You must sign the articles of organization to register your business in South Dakota. You can file them online or via mail.

An operating agreement is a legal document that establishes the rules of the LLC and the members’ duties. While an operating agreement is not required in South Dakota, it is highly recommended. The Operating Agreement is an internal agreement that states the rights, responsibilities, and liabilities of the members of the LLC. It’s not required to file an operating agreement with the South Dakota secretary of state, but it’s important for the LLC to be legally compliant.

F.A.Qs

Can I start an LLC for free?

It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.

Is an LLC expensive?

It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.

Does an LLC need a bank account?

The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.

In Conclusion

The cost of South Dakota is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.

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