How to start a business in South Dakota

What do you file before you open in South Dakota?

1. Pick a structure

   Most owners choose an LLC or a corporation; the S corp or C corp tax choice comes later. See South Dakota LLC guide, South Dakota corporation guide, S corp or C corp in South Dakota. By trade: cleaning business, handyman.

2. Check and register the name

   Search the Secretary of State records before you pick a name: state name search. The South Dakota Secretary of State charges $10 to register a DBA, or fictitious, business name, and $10 to renew one. ¹ See South Dakota name search guide.

3. File with the state

   South Dakota charges the state filing fee once: an LLC costs $153 ² and a corporation's articles of incorporation cost $150 ³. See LLC cost.

4. Name a registered agent

   South Dakota lets your registered agent be a noncommercial agent such as an individual, a commercial registered agent, or an office holder. ⁴ Our registered agent service runs through our partner Registered Agents Inc (RAI), the registered agent of record. See South Dakota registered agent rules.

Which accounts do you open after you file in South Dakota?

1. Get an EIN

   An EIN is the business's federal tax ID. The IRS issues it online, for free, and warns about websites that charge for one. ⁵

2. Open your state tax accounts

   The South Dakota Department of Revenue licenses businesses for sales tax collection through its online Tax License Application, and any business with a physical presence in the state is required to be licensed. ⁶ See Sales tax permit.

3. Register as an employer

   The South Dakota Department of Labor and Regulation requires all newly established businesses to register with its Reemployment Assistance Tax Unit, and successors to a covered business must register within 30 days of the change. ⁷ Employers in South Dakota report newly hired or rehired employees to the New Hire Reporting Center, run by the Department of Labor and Regulation, within 20 days of the first day of work. ⁸ The South Dakota Department of Labor and Regulation states that the Workers' Compensation Law covers all employers with only limited exceptions, including farm or agricultural labor and workfare participants. ⁹

What keeps your South Dakota business in good standing?

1. Check licenses and permits

   The U.S. Small Business Administration's South Dakota district office says business licenses are typically administered by a variety of state and local departments, and that zoning regulations are another consideration when choosing a site. ¹⁰

2. Calendar the yearly filings

   South Dakota annual report: $55, due the 1st day of your formation anniversary month. ¹¹ See South Dakota annual report.

3. Use free local help

   Small business advising in South Dakota runs through the South Dakota Small Business Development Center. ¹² The South Dakota Governor's Office of Economic Development runs a Start Your Business page with a business start-up packet, a guide to licensing and registering a business, a resource directory and a new business checklist. ¹³

What it costs to start a business in South Dakota

Do you need a business license in South Dakota?

It depends on the trade and the place. The U.S. Small Business Administration says most small businesses need a combination of licenses and permits from federal and state agencies, and that requirements and fees depend on the business activity and the issuing agency. ¹⁶ South Dakota's own rule is in step 8. ¹⁰ Where to look up licenses: Start Your Business in South Dakota.

• Contractor's tax license. Anyone in South Dakota who enters a construction contract or does work that builds, installs or repairs a fixture to real property needs a contractor's tax license from the Department of Revenue, which taxes those gross receipts at 2%. ¹⁵

How to register a business name in South Dakota

Check that the name is free first: state name search.

Also in South Dakota

• Municipal sales and gross receipts tax. The South Dakota Department of Revenue administers municipal sales, use and gross receipts taxes, and businesses report them on the same return as the state sales and use tax. ¹⁷
• Tourism tax. The South Dakota Department of Revenue charges a tourism tax of 1.5% on the gross receipts of hotels and lodging, campgrounds, motor vehicle rentals, recreational equipment rentals, recreational services, spectator events and visitor attractions. ¹⁸

More for South Dakota

• LLC guide
• Corporation guide
• South Dakota LLC cost
• Name search
• Registered agent
• South Dakota sales tax permit
• Annual report
• S corp or C corp

Common questions