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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.
LLC Service | Our Rating & Pricing | Top Features | Learn More |
#1 TOP PICK  | $0 + State Fees |
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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.
| States | Filing Fee | Annual/Biennial Fee | Sales Tax |
| South Dakota | $150 | $50 | 4.5% |
| Nebraska | $125 | Not required | 5.5% |
| Wyoming | $102 | $50 | 4% |
| Montana | $70 | $10 | None |
| North Dakota | $135 | $50 | 5% |
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
- 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
F.A.Qs
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.
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.
One of the primary costs associated with maintaining an LLC in South Dakota is the annual report fee. All LLCs operating in the state are required to file an annual report with the Secretary of State and pay a fee to maintain their status as a registered entity. Failure to file this report can result in penalties or even dissolution of the business. The fee for the annual report is relatively minimal compared to other states, but it is still an important expense that LLC owners need to budget for each year.
Another expense that LLC owners need to consider is the franchise tax. South Dakota does not impose a traditional franchise tax on LLCs like some other states do, but there may still be a minimum tax or other fees that LLCs need to pay to maintain their registration. These fees can vary depending on the size and structure of the business, so it’s important for LLC owners to consult with a tax professional to understand their obligations.
In addition to these ongoing fees, LLC owners in South Dakota may also need to budget for other costs such as business licenses, permits, and additional filings required for certain industries. These expenses can add up quickly, so it’s important for entrepreneurs to create a solid financial plan to cover these costs and avoid any surprises down the road.
While the costs of maintaining an LLC in South Dakota can add up, the benefits of operating as a limited liability company often outweigh these expenses. The liability protection that an LLC provides can shield business owners from personal liability for business debts and lawsuits, which can give entrepreneurs peace of mind as they grow their business.
Ultimately, the decision to operate as an LLC in South Dakota should not be taken lightly, and entrepreneurs need to carefully consider the ongoing costs associated with maintaining this business structure. By understanding these expenses and budgeting accordingly, LLC owners can ensure that their business remains in good standing with the state and continues to thrive for years to come.
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.