South Dakota S-Corporation Election
By Edmond Hui · Facts verified July 29, 2026 against primary state sources
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.
Does South Dakota recognize the federal S election?
State treatment of the S election
| Follows the federal election | Yes |
| Separate state election form | None required |
No separate state election to file: the federal election on IRS Form 2553 carries over. That covers the election only, not any return the corporation owes. Of the 50 states, 43 follow the federal election with no state form of their own, and 1 more — New York — recognizes S status but requires an election of its own as well.
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 | 43 |
| No corporate income tax, so no state election exists | 4 |
| 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 | — |
| 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
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.