South Dakota keeps business formation simple and taxes light. To start a business here, file Articles of Organization (LLC) or Articles of Incorporation with the South Dakota Secretary of State through its online portal, get an EIN, and apply for a sales tax license with the Department of Revenue if you sell taxable goods or services. Filing online costs $150 for an LLC or corporation as of October 2026, and annual reports cost $55.
There is no corporate or personal income tax in South Dakota. The main state tax most businesses deal with is sales tax, currently 4.2% at the state level.
Updated October 2026.
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Best Business Formation Services in South Dakota (2026)
Comparing services for forming a business in South Dakota? Start with this ranked shortlist; details for each pick follow the table.
| Rank | Provider | Best for | Price | What’s included |
|---|---|---|---|---|
| 1 | Mainstay Filing | Forming an LLC with the agent, EIN and annual report included | $199/year + state fee at cost | LLC formation filing, registered agent for the year, EIN application, annual report preparation and filing |
| 2 | SD Registered Agent.org | South Dakota registered agent service only | $99/year | $99 per year, flat; in-state street address for the registered office; legal documents served on the company are scanned and sent to the owner online |
| 3 | South Dakota Registered Agent.co | South Dakota registered agent service only | $99/year | in-state street address for the registered office; legal documents served on the company are scanned and sent to the owner online |
1. Mainstay Filing
Mainstay Filing is our top pick in South Dakota. It costs $199/year + state fee at cost and covers lLC formation filing, registered agent for the year, EIN application, annual report preparation and filing. The price stays the same every year, with no add-on menu.
2. SD Registered Agent.org
SD Registered Agent.org is a South Dakota registered agent service at $99/year. It provides $99 per year, flat; in-state street address for the registered office; legal documents served on the company are scanned and sent to the owner online. It’s a fit if you only need a registered agent rather than full formation help.
3. South Dakota Registered Agent.co
South Dakota Registered Agent.co is a South Dakota registered agent service at $99/year. It provides in-state street address for the registered office; legal documents served on the company are scanned and sent to the owner online. It’s a fit if you only need a registered agent rather than full formation help.
South Dakota at a glance (October 2026)
| Item | South Dakota detail |
|---|---|
| Filing office | South Dakota Secretary of State, Business Services |
| Online filing | SOS Enterprise portal |
| LLC Articles of Organization | $150 online, $165 on paper |
| Corporation Articles of Incorporation | $150 online, $165 on paper |
| Annual report | $55 online, $70 on paper |
| Annual report due | First day of the anniversary month of formation |
| Name reservation | $25 for 120 days |
| Fictitious name (DBA) | $10, renewed every five years |
| Income tax | None (corporate or personal) |
| State sales tax | 4.2% (scheduled to become 4.5% on July 1, 2027) |
| Minimum wage | $11.85 per hour |
Fees come from the Secretary of State’s filing fee schedule. Mainstay Filing also tracks South Dakota LLC costs for budgeting.
Choosing a structure for a South Dakota business
Since South Dakota has no income tax, the choice of entity is mostly about liability and federal taxes:
- Sole proprietorship. No formation filing. File a fictitious name statement if you use a name that does not show your surname, and you remain personally liable for debts.
- General partnership. Shared ownership and liability with no state formation filing.
- LLC. Liability protection for $150 online. The most common choice for small businesses. For the full filing walkthrough, see how to start an LLC in South Dakota.
- Corporation. Same $150 formation fee and $55 annual report. Corporations suit owners planning to issue stock or bring in investors.
If you are unsure, start with an LLC. It costs the same as a corporation to form and maintain in South Dakota, needs fewer formalities, and can later elect S corporation tax treatment with the IRS if payroll tax savings make sense.
Naming your business in South Dakota
LLC names must include “limited liability company”, “limited company”, “LLC”, “L.L.C.”, “LC” or “L.C.”, and they must be distinguishable from others on file, under SDCL 47-34A-105. Corporate names must include “corporation”, “incorporated”, “company” or “limited”, or an abbreviation.
Check your name in three places:
- The Secretary of State’s name availability search, with help from our South Dakota business name search guide.
- Domain names and social handles, using Namechk.
- The USPTO’s federal trademark records.
The business name generator is useful if you are still choosing. You can reserve a name for $25 for 120 days.
Fictitious names (DBAs)
South Dakota calls a DBA a fictitious name statement. You can file it online with the Secretary of State or on paper with any county register of deeds, and it costs $10 per name, according to the Secretary of State. Registrations must be renewed every five years; the renewal window opens 30 days before expiration, and an expired name must be registered again as new. You do not need a fictitious name statement if your business name shows the true surnames of all owners.
Picking a registered agent
Every South Dakota LLC and corporation needs a registered agent with a physical and mailing address in South Dakota. The agent can be:
- A noncommercial agent, meaning a South Dakota resident or registered entity.
- A commercial registered agent registered with the Secretary of State.
- For corporations only, an officer or office title of the corporation.
Changing your agent costs $10. Many owners hire a commercial agent so legal papers never go to a home address. Mainstay Filing includes a South Dakota registered agent for the first year in its formation package.
Filing your Articles online
The Secretary of State’s online registration takes LLC and corporation formations. To file:
- Start a new registration in the SOS Enterprise portal.
- Enter the name, registered agent, principal office and organizers.
- Pay $150. Paper filings cost $165 because South Dakota charges a $15 paper fee on documents that could have been filed online.
South Dakota does not require newspaper publication. After approval, sign an operating agreement (LLC) or adopt bylaws (corporation) for your records.
Apply for an EIN
Get a free Employer Identification Number from the IRS. You need one to hire employees and open a business bank account, and it simplifies your Department of Revenue application.
Register with the South Dakota Department of Revenue
According to the Department of Revenue, South Dakota does not impose a corporate income tax, and the state has no personal income tax either. That leaves sales tax as the main registration for most businesses:
- Sales and use tax license. Required for retailers. Apply through the Department of Revenue’s online tax license application.
- State rate. 4.2%, under SDCL 10-45-2, scheduled to return to 4.5% on July 1, 2027. Many municipalities add their own sales tax, and the Department of Revenue offers a rate lookup tool.
- Contractor’s excise tax applies to construction contractors, and a bank franchise tax applies to financial institutions.
Because South Dakota has no income tax, employers do not withhold state income tax from wages.
Hiring employees
South Dakota’s minimum wage is $11.85 per hour as of January 1, 2026, and $5.925 for tipped employees, according to the Department of Labor and Regulation. The rate is adjusted each year. Employers also:
- Register with the Department of Labor and Regulation for reemployment assistance tax, South Dakota’s name for unemployment insurance.
- Report new hires through the same DLR employer system.
- Carry workers’ compensation. South Dakota requires it regardless of how many employees you have, with exceptions for farm laborers and some domestic workers, under SDCL 62-3-15.
Licenses and permits
South Dakota has no statewide general business license. Depending on your work, you may need:
- A sales tax license from the Department of Revenue.
- A state occupational or professional license, for fields such as electrical work, plumbing, cosmetology or real estate.
- City or county licenses and permits in places such as Sioux Falls and Rapid City, including zoning and building approvals.
The South Dakota SBDC offers free advising to help you find the right licenses.
Banking and insurance
Open a business bank account with your approved Articles, EIN and operating agreement. Mixing business and personal funds weakens your liability protection and complicates bookkeeping. Insurance to consider includes general liability, professional liability, commercial auto and property coverage, along with the required workers’ compensation.
Annual reports in South Dakota
Every South Dakota LLC and corporation files an annual report. The Secretary of State says it is due by the first day of the anniversary month of the original filing: a company that filed on June 11, 2026 owes its first report by June 1, 2027. You can file up to two months early. The fee is $55 online or $70 on paper.
A report filed after the anniversary month is delinquent and carries a late fee, and continued delinquency can lead to administrative dissolution. Dissolved companies must reinstate before they can file online again.
A change arrives in 2027. Under a 2026 law amending SDCL 59-11-25, starting January 1, 2027, companies can choose either their anniversary month or a January 31 deadline for annual reports.
Getting your South Dakota business online
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FAQs
How much does it cost to start an LLC in South Dakota?
As of October 2026, filing Articles of Organization for a South Dakota LLC costs $150 online or $165 on paper with the Secretary of State. Each year after that, the LLC files an annual report for $55 online or $70 on paper. A $25 name reservation and a $10 fictitious name statement are optional.
Does South Dakota have a state income tax?
No. South Dakota has no personal income tax and does not impose a corporate income tax, according to the Department of Revenue. Businesses still deal with sales and use tax, and certain industries pay specific taxes, such as the contractor’s excise tax for construction contractors and the bank franchise tax for financial institutions.
When is the South Dakota annual report due?
South Dakota annual reports are due by the first day of the anniversary month of the company’s original filing. A company formed on June 11, 2026, for example, files by June 1, 2027. Reports can be filed up to two months early. Starting January 1, 2027, companies can opt for a January 31 due date instead.
How do I file a DBA in South Dakota?
File a fictitious name statement online with the Secretary of State or on paper with any county register of deeds. The fee is $10 per name, and the registration must be renewed every five years. You do not need one if your business name includes the true surnames of all the owners.
What is the sales tax rate in South Dakota?
South Dakota’s state sales and use tax rate is 4.2%, and it is scheduled to return to 4.5% on July 1, 2027 under current law. Many cities add municipal sales taxes, so the combined rate varies by location. Retailers apply for a sales tax license through the Department of Revenue.
Is workers’ compensation required in South Dakota?
Yes. South Dakota requires employers covered by its workers’ compensation law to carry coverage no matter how many employees they have, so even a business with one employee needs a policy. Farm and agricultural laborers are exempt, and domestic workers are exempt unless they work more than 20 hours a week for more than six weeks in any 13-week period.
What is the minimum wage in South Dakota in 2026?
South Dakota’s minimum wage is $11.85 per hour as of January 1, 2026, according to the Department of Labor and Regulation. Tipped employees must receive a cash wage of at least $5.925 per hour. The state adjusts the minimum wage every year, so check the department’s posting each January.
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