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

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.

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.

When it comes to running a business, there are various factors that entrepreneurs need to keep in mind. One crucial consideration is the cost associated with maintaining their company’s legal structure. In South Dakota, one popular form of business entity is the Limited Liability Company (LLC). These LLCs offer business owners flexibility in terms of taxation, legal liability, and operational control. However, it’s essential to be well-informed about the costs involved in maintaining an LLC in this state before deciding if it is the right path for your business.

Setting up an LLC in South Dakota is relatively straightforward and affordable. However, there are some ongoing costs to be aware of to ensure compliance with state regulations. The first expense business owners should be prepared for is the filing fee. To maintain their LLC status, owners need to file an Annual Report, accompanied by a filing fee, each year. This fee covers administrative costs and allows the state to keep accurate records of the LLCs operating within its jurisdiction.

In addition to the aforementioned filing fee, South Dakota LLCs may incur additional costs, such as the fee for obtaining necessary licenses or permits specific to their industry and operations. These costs vary depending on the type of business, so it’s critical to stay up-to-date on any permits that may be required for your specific industry.

One advantage of operating as an LLC in South Dakota, especially for smaller businesses, is the absence of a state-level income tax. Unlike many other states, South Dakota does not impose an income tax on the profits generated by the company itself. This can save business owners significant sums of money, as they are only required to report their business profits on their personal income tax return.

However, it’s crucial to bear in mind that individual shareholders or members of an LLC in South Dakota may still be subject to federal income taxes on their share of the company’s profits. Any profits distributed to LLC members as income will be taxable on their personal tax returns, similar to partnerships or sole proprietorships. Seeking the advice of a professional tax consultant is, therefore, strongly recommended to ensure compliance with both state and federal tax obligations.

Despite the associated fees, it’s essential to place the costs of maintaining an LLC into perspective. When considering the many advantages that adopting this business structure can offer, the overhead costs become easily justifiable. An LLC provides owners with limited personal liability protection, separating their personal assets from the company’s liabilities. This can be a significant advantage for many entrepreneurs, offering peace of mind as they venture into the business world.

While it may be impossible to provide an exact figure on the total cost of maintaining an LLC in South Dakota without delving into specific data or statistics, it is important to bear in mind that such costs vary depending on a variety of factors including the nature of your business, its size, and its annual revenue. Costs shouldn’t deter entrepreneurs from considering this business structure, especially when contemplating the long-term benefits an LLC can provide.

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.


About Author & Editorial Staff

Steve Goldstein, founder of LLCBuddy, is a specialist in corporate formations, dedicated to guiding entrepreneurs and small business owners through the LLC process. LLCBuddy provides a wealth of streamlined resources such as guides, articles, and FAQs, making LLC establishment seamless. The diligent editorial staff makes sure content is accurate, up-to-date information on topics like state-specific requirements, registered agents, and compliance. Steve's enthusiasm for entrepreneurship makes LLCBuddy an essential and trustworthy resource for launching and running an LLC.

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