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.
On this page, you’ll learn about the following:
- South Dakota LLC Cost of Filing
- Taxes payable to the South Dakota Department of Revenue
- Cost Comparison Between States
- Other Costs
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.
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.
|States||Filing Fee||Annual/Biennial Fee||Sales Tax|
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.
- South Dakota Name Reservation: $25 by mail
- Doing Business As (DBA): $10 for online filling
- Certified Document Copies: $15 + $2 per page.
- Certified of Good Standing: $20
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of South Dakota LLC: $10
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.
Getting a South Dakota LLC set up is a great way to launch a business. But it also comes with a host of costs. While it isn’t the most expensive form of business in the United States, there are still plenty of costs that you should be aware of before deciding to form an LLC in South Dakota.
One of the biggest expenses you will incur is the filing fee for an LLC. You will also need to file an annual report with the Secretary of State. You will also have to pay sales tax and other taxes to the state. If you fail to pay taxes on time, you may have to pay a penalty. You also have to pay unemployment insurance tax if you have employees. There are other taxes that you may have to pay depending on the industry you operate in.
Another major expense to consider is your registered agent. You can choose to have your own registered agent or have a professional service do it for you. You will need a registered agent in case you need to file legal documents or contact the state when your LLC is suing someone. You should choose a registered agent who is available during normal business hours. There are a few companies that offer this service. But you will need to pay a yearly service fee.
You should also consider filing a DBA (doing business as). A DBA is a different kind of business name than the official name of your LLC. An EIN (employer identification number) is also a great idea, but it isn’t required in South Dakota. The IRS website offers a free EIN, and you may be required to have one if you want to open a business bank account.
There are also several professional licenses you will need to purchase for your business. These may be industry-specific licenses or licenses required by the city or county you operate in. It’s a good idea to check with your local government to see which licenses you need and how much they will cost. There are many business licenses that you can choose from, but each one comes with a fee. Depending on your business, you may need to pay a one-time fee or a yearly fee.
If you aren’t sure about the costs of setting up an LLC in South Dakota, it’s best to consult an accountant or professional. This will help you make smart financial decisions. Having an accountant on board is also a good idea, since they can help you make sure your LLC is up-to-date on all the legal requirements. However, if you want to save money, you may be able to find an affordable business formation service that will handle the paperwork for you.
The most important form to file is the Articles of Organization. This is a one-time filing, and you will need to provide some important information about your LLC. For example, you will need to provide your legal name, contact information for each organizer, and the contact information for your registered agent.
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
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.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
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.