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.
Limited liability companies (LLCs) have become one of the more popular business structures in the United States due to the many advantages they offer. There are many reasons why people choose to form an LLC, such as the tax benefits, creditor protection, and flexibility in management and ownership.
However, every business structure comes with its costs, and forming an LLC is no exception. Maintaining an LLC in South Dakota requires an entrepreneur to navigate different fees and compliance costs, which can add up quickly.
One of the ongoing costs of maintaining an LLC in South Dakota is the annual report fee. An LLC must file an annual report in order to continue doing business in a state. In South Dakota, the annual report fee is $50, which is relatively affordable compared to other states.
Another cost of maintaining an LLC is the initial filing fee. To form an LLC in South Dakota, entrepreneurs need to file articles of organization on the Secretary of State’s website or through a registered agent. The filing fee for articles of organization in South Dakota is $150, which is higher than the annual report fee but still manageable for many new business owners.
South Dakota doesn’t require an LLC to have an operating agreement, but having one can help reduce legal disputes and protect the business by clarifying the role of each owner. An operating agreement can be drafted by an attorney or online legal service provider, with costs ranging from $100 to $500 or more depending on the complexity of the agreement.
Another incidental cost of an LLC is getting a business license. Most LLCs are subject to state, local, and federal licensing regulations to conduct business. Business licensing application fees in South Dakota typically range from $75 to $600 annually, depending on the business type.
Moreover, owners of an LLC can choose to hire a registered agent to handle all related legal notices, or they can be the entity’s registered agent themselves. In South Dakota, registering a third-party service to act as a registered agent can cost anywhere between $50 to $500 annually.
Apart from these expenses, an LLC must fulfill its yearly tax obligations, acquire business income insurance, pay its employees, and fulfill any industry-specific regulations.
In all, the cost of maintaining an LLC in South Dakota varies depending on the means and extent of services needed. From the costs highlighted discussed it is clear that keeping an LLC running in South Dakota isn’t a considerable economic burden. However, it’s important for entrepreneurs to factor in these extra costs when planning out their long-term business budgets.
Overall, experiencing the level of freedom, liability, attentive services and tax benefits available to an LLC in South Dakota might itself justify whatever incidental costs an LLRs operating within the state may incur.
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.