Summary
The fact that you may need to register with state agencies like South Dakota Secretary of State is a sneaky misconception that many folks miss.
However, with the rise of remote work, states have begun cracking down and levying penalties for those who (unknowingly) fail to register.
If you're considering operating in South Dakota, use this guide to:
- Explore the that triggers the need to register with the South Dakota Secretary of State, including criteria such as physical presence, economic activity, and advertising efforts.
- Determine where and how to register with the South Dakota Secretary of State.
- Understand additional requirements such as Registered Agents, registration with other state departments, and ongoing annual reports.
What criteria would trigger the requirement to register with the South Dakota Secretary of State?
Key Factors
Physical Presence: The following indicate you're doing business in South Dakota:
- Having an office, store, warehouse, or other physical place of business.
- Having employees, contractors, or sales representatives operating in the state.
- Owning or leasing property in South Dakota (real estate or tangible property).
Economic Activity: These economic activities also suggest you're doing business in South Dakota:
- Selling goods or services to South Dakota customers (even via remote or online sales).
- Providing services within South Dakota.
- Engaging in a sufficient number of transactions within the state.
Specific Examples
The following activities would likely be considered doing business in South Dakota:
- Operating a retail store or restaurant in South Dakota.
- Maintaining a warehouse or distribution center in South Dakota.
- Sending employees to provide on-site services to clients in South Dakota.
- Having a sales team that regularly visits South Dakota-based clients.
- Selling products to South Dakota residents through an online store or marketplace (especially if you hit certain sales thresholds).
Nexus and Remote Sellers
South Dakota has adopted rules in line with the Wayfair decision, specifically addressing "nexus" for remote sellers. If you're an online business with no physical presence in South Dakota, you may still create nexus and have to collect sales tax if you exceed either of these thresholds:
- $100,000 in gross sales into South Dakota in the current or previous calendar year.
- 200 or more separate transactions into South Dakota in the current or previous calendar year.
Where do I register, and what else is required?
South Dakota Secretary of State
- A Certificate of Good Standing is not required.
In addition:
A Registered Agent is required to serve as the company's physical in-state presence to receive important legal documents. Do not fall victim to the common misconception that you can leverage an in-state employee as your Registered Agent. It's far too risky.
You'll want to review the other registrations required in South Dakota. Here's a South Dakota specific guide we put together.
What is the registration fee?
The fee charged by South Dakota is $750 (if registration is needed).
How long does South Dakota usually take to process?
South Dakota usually takes approximately 1 - 2 weeks to process registrations.
What is required ongoing?
Each state has a complex schedule of required annual reports, which can vary by entity type. Let's take a look at South Dakota's:
C-Corporation
- Filing Date: April 15
- Filing Frequency: Annual
LLC
- Filing Date: April 15
- Filing Frequency: Annual
Non-Profit
- Filing Date: April 15
- Filing Frequency: Annual
There is an Easier Way
Automate registration and annual report tracking in AbstractOps.This guide should definitely help reduce some of the confusion for South Dakota. However, if you have multiple states to worry about, you may look to:
Automate state registrations and annual reports
Centralize email, snail mail, state ID’s, and registered agents, and
Take control of action items, eliminating risks before they become penalties.
Start the AbstractOps product demo to see how easy this can be.
Note: For the avoidance of doubt, nothing provided here shall contemplate, constitute or include tax or legal advice. Always double check with state agency websites for the most up-to-date requirements.
