Do I need to make a state S-corporation election in South Dakota?

No. There is nothing to elect into. South Dakota has no corporate income tax, so there is no state S-corporation election, recognition, or income-tax return. Your federal S election still governs your federal return.

South Dakota S-Corporation Election

By Edmond Hui · Facts verified July 29, 2026 against primary state sources

There is no South Dakota S-corporation election, because there is nothing to elect into: South Dakota has no corporate income tax. Your federal S election still governs your federal return, and it changes nothing at the state level here.

S corporation facts for South Dakota: the state has no corporate income tax, so there is no state S election to make. Incorporating costs $150 to file. The annual report fee is $55. — South Dakota has no corporate income tax, so there is no state S election to make; IRS Form 2553 governs the federal return only. Source: MyStateLLC 50-state S-corp election dataset, compiled from state filing offices and revenue departments, July 2026; any figure we could not confirm is labeled on the page.

State treatmentNo state election exists

Separate state formNot required

State corporate income taxNone

Does South Dakota recognize the federal S election?

State treatment of the S election

Follows the federal election	Not applicable, no corporate income tax
Separate state election form	None required

South Dakota is one of 5 states with no corporate income tax where the state S election simply does not exist. That is not the same as the state rejecting the election. There is no state income tax for it to apply to. Your federal S election is unaffected.

What an S corporation still owes South Dakota

South Dakota has no corporate or personal income tax, so there is no state S-corp or C-corp income tax return and no state-level S-election. A federal S election has no South Dakota income-tax consequence. Only financial institutions file (bank franchise tax).

Franchise or gross-receipts tax

No general corporate franchise tax. South Dakota levies a Bank Franchise Tax only on financial institutions (banks and certain financial corporations); it does not apply to ordinary business corporations.

South Dakota corporation vs South Dakota LLC

State filing charges only. Corporate income tax and franchise tax are excluded because both depend on income or net worth, so no flat figure exists for either entity.

	Corporation	LLC
Formation filing fee	$150	$150
Report cadence	Every year	Every year
Report fee	$55	$55

Both entities cost $150 to file in South Dakota, so the filing fee is not a reason to pick one over the other.

Full South Dakota LLC cost breakdown · LLC vs C-corp explained · LLC vs S-corp explained

How South Dakota compares

State treatment of the federal S election	States
Follows the federal election, no state form needed	42
No corporate income tax, so no state election exists	5
Has a corporate income tax and does not follow the election. The corporation is taxed like a C corporation	2
Follow the election but still impose some entity-level tax on the S corporation, California, Illinois, New York, Massachusetts and Delaware among them	N/A
Require a separate state election form as well	1

Compare all 50 states · LLC vs S-corp · S-corp salary and savings calculator

Frequently Asked Questions

: No. There is nothing to elect into. South Dakota has no corporate income tax, so there is no state S-corporation election, recognition, or income-tax return. Your federal S election still governs your federal return.
: South Dakota has no corporate or personal income tax, so there is no state S-corp or C-corp income tax return and no state-level S-election. A federal S election has no South Dakota income-tax consequence. Only financial institutions file (bank franchise tax).

Where these numbers come from

This page covers how South Dakota treats the federal S-corporation election and what an S corporation still owes the state. Every figure was checked against South Dakota's own published sources on July 29, 2026, the state business filing agency's fee schedule, the governing statute, and where a state tax applies, the state Department of Revenue. Commercial formation-service pages were used as leads only and are never cited. Anything the review could not confirm from an official source is left blank on this page rather than filled with an estimate.

Corporate income tax and franchise tax are quoted as the state publishes them, as rate schedules and thresholds, and are excluded from every dollar total here. They depend on income or net worth, so there is no flat figure that would be true for every corporation.

Primary sources:

This guide is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. It describes rules that can differ from state to state, and fees, rates, forms and deadlines can change after we review them. It cannot tell you what applies to your own business: that turns on where the business is formed, where it operates and how it is taxed. Confirm anything you rely on with the state or federal agency concerned, or with a licensed attorney or CPA, before you act on it.

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Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.

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