LLC Annual Report and Tax Filing Requirements in South Dakota

If you want to create a limited liability company (LLC), you need to be aware of its maintenance requirements. While they offer many benefits like limited liability and flexible tax and management structures, LLCs also need to be organized and maintained with the state.

In South Dakota, you must file an annual report for your LLC and pay the associated filing fee. Let's review the most important ongoing reporting and state tax filing requirements for South Dakota LLCs. (If you want information about other states' LLC requirements, take a look at our article on LLC tax and filing requirements.)

South Dakota LLC Annual Report

The State of South Dakota requires you to file an annual report for your LLC with the South Dakota Secretary of State (SOS). You can file your annual report online through the SOS's online business services. You can also print out and complete a paper copy and mail it to the SOS.

You'll need to provide basic information about your LLC, including:

• your LLC's name and state-issued ID number
• the address of your LLC's principal office
• the name and street address of your LLC's registered agent
• the names and address of the LLC's managers (if the business isn't member-managed), and
• whether your LLC owns agricultural land.

The annual report must be filed each year by the first day of the second month following the month in which the LLC was created. As of 2023, the filing fee for a South Dakota LLC annual report is $50 for online filing and $65 for paper filing.

State Business Taxes in South Dakota

When it comes to income taxes, most LLCs are considered "pass-through tax entities." As a pass-through entity, the LLC doesn't pay taxes on its income. Instead, the responsibility for paying income taxes passes through the LLC and falls on the LLC members. Typically, LLC members report and pay their share of the LLC's income on their personal tax returns.

However, South Dakota is one of only a very few states that doesn't have a personal income tax or a corporation income tax. Consequently, for most LLCs, including those that have elected to be taxed as corporations (by filing IRS Form 2553 with the IRS), no state income taxes are due. Moreover, because South Dakota also doesn't have a personal income tax, LLC members generally will owe no state tax on income they earn from a South Dakota LLC.

While you and your LLC will not owe income taxes in South Dakota, you'll still need to pay taxes to the federal government.

South Dakota Employer Taxes

If your LLC has or plans to have employees, you must pay employer taxes to the federal and state governments. Make sure you get an employer identification number (EIN) from the IRS if you haven't done so already so you can report and pay these taxes as an employer.

Because South Dakota doesn't have a personal income tax, you don't need to withhold your employees' wages for that purpose. But you'll probably need to register to pay the state's reemployment assistance (RA) tax to the South Dakota Department of Labor and Regulation (DLR). In other states, the RA tax might be called an "unemployment insurance tax."

You can register for state RA tax either:

• online using Register Your Business, or
• by mail using the Employer's Registration Application (Form 1).

Then, each quarter, you must report on wages and pay the RA tax. You can mail in Form 21 or file and pay online to file and pay this tax.

South Dakota Sales and Use Tax

If your LLC plans to sell taxable goods or services to customers in South Dakota, you'll need to collect and pay sales tax to the South Dakota Department of Revenue (DOR). You must apply for a sales tax license with the DOR if your business is located in South Dakota or if you're a remote seller with a certain amount of sales in the state. You can register for a sales tax license online.

You'll need to file your sales and use tax returns and pay the sales tax owed periodically—for example, monthly, bimonthly, quarterly, or semiannually. The DOR will assign your LLC a filing frequency, usually dependent on your sales. You can file your returns and pay the taxes due using the DOR's Filing and Tax Payment portal.

Check out the sales and use tax section of the DOR website for more about this tax, including how to get a license, facts related to specific industries, and sales tax exemptions.

LLC Registration in Other States

Some owners organize their LLCs in one state but do business in another. For example, you might organize your LLC in South Dakota but do business in Minnesota. If you have business activities outside your home state, you might need to register as an out-of-state (foreign) LLC in the states where you do business.

Every state has rules and requirements for when an out-of-state business must register. Typically, states will define which business activities require foreign qualification. Often activities such as having a physical presence (a business location) in a state, hiring employees in a state, or soliciting business in a state (such as by telephone, print ads, mail, or the internet) will be considered doing business for registration purposes. You should check each relevant state's laws around qualifying as a foreign business.

If you'd like more information about registering as a foreign LLC, you can check out our state guide to qualifying to do business outside your state.

More Information About South Dakota LLCs

If you're looking for additional guidance on running your LLC, you should read the articles in the LLC section of our website. These articles have information about how to start, operate, manage, and dissolve your LLC. If you have special considerations or legal questions, you should speak with a South Dakota business lawyer. An attorney can help you navigate the reporting and tax filing processes for your South Dakota LLC.