South Dakota Business Compliance Checklist
South Dakota has no income tax and was the state whose case (Wayfair) enabled modern economic nexus law. This page covers everything from filing fees to sales tax to hiring laws.
$150
$50
Every year
4.2%
state base rate
No
1. Entity Formation
| LLC filing fee (Articles of Organization) | $150 |
| Corp filing fee (Articles of Incorporation) | $150 |
| Registered agent required | Yes — must have a physical address in the state |
| Publication requirement | No |
| Processing time | ~7 business days (expedited available for extra fee) |
2. Annual Maintenance
| Annual/periodic report | Every year — fee $50 |
| Franchise tax | None |
3. Sales Tax
| State base rate | 4.2% |
| Combined rate range (with local) | 4.2% – 6.2% |
| Economic nexus (out-of-state seller) | $100,000 per year |
| Marketplace facilitator law | Yes — marketplaces (Amazon, Etsy) collect on your behalf. |
Need to check nexus across multiple states? Use our Sales Tax Nexus Checker.
4. Employer Requirements
| Minimum wage | $11.50/hr (2025) |
| Paid sick leave law | None (federal only) |
| Non-compete enforceability | Enforceable — reasonable scope and duration required |
| Contractor classification test | Common-law (IRS) test |
Full employment law breakdown: South Dakota Hiring Laws.
5. Workers' Compensation
South Dakota allows private-market workers' comp insurance (competitive market). Coverage is required starting with your first employee.
Estimate your premium with our Workers' Comp Calculator.
6. State Income Tax
South Dakota has no state individual income tax. This applies to pass-through business income (sole prop, LLC, S-Corp).
Compliance by Business Structure
Pick your structure to see structure-specific compliance items.
What Makes South Dakota Distinctive
Compliance quirks and rules that separate South Dakota from other states — worth understanding before you file.
- South Dakota charges $150 for LLC formation and $50 for the annual report.
- South Dakota Secretary of State handles entity filings.
- South Dakota has no state income tax — a competitive draw for pass-through businesses.
This is a reference, not legal advice.
State fees and rules change. Verify current values with the South Dakota Secretary of State, Department of Revenue, and Department of Labor before filing. For complex situations, consult a licensed CPA or attorney.