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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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

There are several expenses associated with running an LLC. Listed below are some of the most common. First, you need to obtain a Federal Tax ID Number (EIN), also known as a federal tax number. This number is similar to your social security number, and it is used by the IRS for tax purposes. The EIN can also be used to open bank accounts. In addition, you will need to obtain a Federal Employer Identification Number (FEIN) for your business.

Once you have your LLC formed, you need to pay a fee. This fee is usually between $150 and $190. You can find the current fee schedule on the South Dakota Secretary of State’s website. You don’t have to choose a specific type of business in South Dakota to file your taxes. However, many entrepreneurs choose this entity because of the benefits of running an LLC, such as being exempt from double taxation, having customizable ownership options, and simplified reporting requirements.

In addition to paying a filing fee, you also need to pay a late fee for filing your annual report. You will be required to submit Form SS-4 every year by mail or fax. The first annual report is due on the last day of the month of the LLC’s anniversary. This fee can be avoided by using a registered agent service. These fees should be considered when deciding how to form an LLC.

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.

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