Assuming that because South Dakota has no income tax there is nothing to file. The annual report is easy to forget precisely because nothing else is due, and letting it lapse leads to delinquency and eventual administrative dissolution. Because the due date is tied to your own registration month rather than a fixed statewide date, you cannot rely on a calendar rule of thumb — look your date up on the Secretary of State's business search tool and calendar it.
No personal income tax
S-corp election in South Dakota
In short
No income tax and no franchise tax on ordinary businesses. The only recurring state-level obligation is the Secretary of State annual report: $55 filed online, $70 on paper.
Does South Dakota recognize the federal S election?
South Dakota has no personal income tax and no general corporate income tax, so there is nothing for South Dakota to "recognize" — your federal S election has no South Dakota income-tax consequence and there is no South Dakota S election. Your only recurring state obligations are the Secretary of State annual report and, if you have employees, unemployment insurance. (A separate bank franchise tax under SDCL chapter 10-43 applies to financial institutions only.)
Tax the entity still owes
South Dakota imposes no personal income tax and no general corporate income tax, so an S corporation has no South Dakota income tax return and no entity-level income tax. ANNUAL REPORT FEE: $55 if filed online, $70 if filed on paper — confirmed from the South Dakota Secretary of State's official fee schedule in prior research. The Secretary of State's own pages direct filers to a lookup tool ("use the Search Tool to see when your Annual Report is due") rather than stating a rule. LATE FEE: there is an unresolved CONFLICT between two official South Dakota sources — the fee schedule lists "Late Fee for Delinquent Annual Reports $55," while the annual report instructions page states delinquent reports "incur an additional $50 late fee." Because the two official pages disagree, treat either figure as indicative and confirm the current amount with the Secretary of State before relying on it. BANK FRANCHISE TAX: SDCL chapter 10-43 imposes a franchise tax on financial institutions; it does not apply to ordinary operating businesses.
Registering for payroll
South Dakota has no state income tax withholding, so an S corp paying wages does NOT register for state income tax withholding — this is a genuine simplification versus most states. The employer must still register for reemployment assistance (unemployment insurance) with the South Dakota Department of Labor and Regulation, and carry workers' compensation coverage as applicable. Direct the user to dlr.sd.gov.
Annual filings
Reemployment assistance (unemployment) quarterly wage reports to the South Dakota Department of Labor and Regulation if the entity has employees. There is NO South Dakota income tax return, no franchise tax return, and no state withholding return for an ordinary operating business.
Pass-through entity tax
Not applicable. South Dakota has no personal or corporate income tax, so there is no state income tax for a pass-through entity tax to work around and no SALT-cap workaround to elect.
The mistake owners make most often in South Dakota
Filing your federal Form 2553
Businesses operating in South Dakota send Form 2553 to the IRS Ogden service center — fax 855-214-7520. Full address and filing checklist for South Dakota.
Frequently asked questions
Does South Dakota require a separate S-corporation election?
No. South Dakota does not require a separate state election. South Dakota has no personal income tax and no general corporate income tax, so there is nothing for South Dakota to "recognize" — your federal S election has no South Dakota income-tax consequence and there is no South Dakota S election.
What tax does an S corporation pay in South Dakota?
No income tax and no franchise tax on ordinary businesses. The only recurring state-level obligation is the Secretary of State annual report: $55 filed online, $70 on paper.
Where do I file Form 2553 from South Dakota?
With the IRS Ogden service center. Fax 855-214-7520, or mail to Department of the Treasury, Internal Revenue Service, Ogden, UT 84201.
What is the most common S-corp mistake in South Dakota?
Assuming that because South Dakota has no income tax there is nothing to file. The annual report is easy to forget precisely because nothing else is due, and letting it lapse leads to delinquency and eventual administrative dissolution. Because the due date is tied to your own registration month rather than a fixed statewide date, you cannot rely on a calendar rule of thumb — look your date up on the Secretary of State's business search tool and calendar it.
Compare with other states: Tennessee, Texas, Utah, Vermont, Virginia, Washington.
Sources
File your Form 2553 correctly
Scorply completes your federal election and includes a South Dakota guide in your packet, so you know exactly what else you owe here.
Start my Form 2553Some details here are less firmly sourced
South Dakota publishes some of this information in places our checks could not reach directly, so a few of the finer details below — filing fees, exact due dates — are drawn from secondary sources. The recognition rule and the entity-level tax are solid. Confirm the specifics with the state before you rely on a date or a dollar figure.
Researched from official South Dakota sources and verified July 30, 2026. State tax rules change. This is general information, not tax advice — confirm with the state or a CPA before you rely on it.