South Dakota vs West Virginia LLC: fees, taxes, and which to pick
Data last updated: Apr 21, 2026South Dakota charges $150 to form an LLC; West Virginia charges $100. Day-one sticker price is only part of the story, since most of the real cost comes from the annual obligations that stack up each year you keep the LLC open.
Over a rolling three-year window, West Virginia runs about $140 less in total state fees than South Dakota. Whether that gap matters depends on whether you actually operate in one of these states or are weighing a non-resident filing.
On speed, South Dakota typically clears standard online filings faster than West Virginia. Both states offer expedited tiers at an additional cost for filers on tight timelines.
For most small operators the choice is not really between these two states at all. It is between forming where the business actually operates and trying to route through a non-resident filing. The data below shows what each option actually costs.
Key differences at a glance
- West Virginia costs $50 less to form ($100 vs $150).
- West Virginia is $30 per year cheaper to maintain ($125 vs $155).
- South Dakota has no state individual income tax; pass-through LLC income flows to members without a state layer. The other state does tax at the member level.
Where each state fits
For most filers, forming in the state you actually operate from is the right call. The side-by-side below shows where the two states meaningfully diverge.
What each state offers that the other does not
Only South Dakota
- No state income tax
Both states
- Online filing
- Paid expedited tier
- No entity-level franchise or LLC tax
- No publication requirement
- Operating agreement not statutorily required
Three-year cost, side by side
Rough estimate of the state-facing cost to form and keep an LLC through three years. Both totals include a $100 per year registered-agent estimate.
Running total includes the one-time filing fee and annual ongoing costs (report fee or franchise tax plus a $100/year registered agent estimate).
What it costs under your specific situation
The table below runs the same LLC through four common scenarios. "Non-resident" rows assume a typical home-state foreign LLC registration adds about $200 per year of stacked cost; the real number depends on which state you live in and ranges from $50 to over $800 depending on jurisdiction.
| Scenario | Year 1 | Each year after | 3-year total |
|---|---|---|---|
| You live in South Dakota, business operates there No foreign LLC registration needed. You pay South Dakota fees only. | $305 | $155 | $615 |
| You live in West Virginia, business operates there No foreign LLC registration needed. You pay West Virginia fees only. | $225 | $125 | $475 |
| Non-resident forming in South Dakota with operations elsewhere You pay South Dakota's fees plus a typical home-state foreign LLC registration of about $200 per year. | $505 | $355 | $1,215 |
| Non-resident forming in West Virginia with operations elsewhere You pay West Virginia's fees plus a typical home-state foreign LLC registration of about $200 per year. | $425 | $325 | $1,075 |
South Dakota vs West Virginia: full comparison
| Dimension | South Dakota | West Virginia |
|---|---|---|
| Online filing Can you file the formation document online? | Yes | Yes |
| Online approval time Standard, non-expedited | 1 business day | 5 business days |
| Expedited option Paid fast-track filing | $50 | $25 |
| Annual report Required in addition to tax | Required, $55 | Required, $25 |
| State-imposed annual tax Franchise, privilege, or LLC tax minimum | None | None |
| State income tax On pass-through LLC income at member level | No | Yes |
| Publication requirement Newspaper publication after formation | No | No |
| Operating agreement Required by state statute | Recommended, not required | Recommended, not required |
| Foreign LLC fee Cost to register as a foreign LLC in this state | $750 | $150 |
| State sales tax General statewide rate | 4.2% | 6.0% |
Taxes in South Dakota and West Virginia
How each state handles entity-level tax on LLCs. Pass-through classification means member-level income tax also applies at each member's residence state.
South Dakota tax
No entity-level franchise tax on LLCs. No state income tax.
West Virginia tax
No entity-level franchise tax on LLCs. State income tax applies to member-level pass-through income. Corporate rate 6.5%.
Ongoing compliance
The recurring filings each state requires after formation.
South Dakota
Annual report $55, due on your anniversary month. Registered agent required in South Dakota.
West Virginia
Annual report $25, due 06/30 each year. Registered agent required in West Virginia.
Formation process, side by side
What actually happens from the moment you start filing to the moment you're in good standing. Use this as a checklist.
South Dakota
- Check business-name availability on the South Dakota entity search.
- Appoint a registered agent with a physical South Dakota street address.
- File Articles of Organization (Domestic Limited Liability Company) for $150.
- Wait for approval. Online typically 1 business days. Paid expedite from $50.
- Adopt an operating agreement (recommended, not required by South Dakota statute).
- Apply for a federal EIN (free from the IRS).
- Open a business bank account to separate personal and business finances.
- File your first annual report and pay $55 when it comes due.
West Virginia
- Check business-name availability on the West Virginia entity search.
- Appoint a registered agent with a physical West Virginia street address.
- File Articles of Organization (Form LLD-1) for $100.
- Wait for approval. Online typically 5 business days. Paid expedite from $25.
- Adopt an operating agreement (recommended, not required by West Virginia statute).
- Apply for a federal EIN (free from the IRS).
- Open a business bank account to separate personal and business finances.
- File your first annual report and pay $25 when it comes due.
Before you pick either state
A few things that apply no matter which state you choose. These trip up enough first-time filers that they're worth stating explicitly.
Registered agent is non-negotiable. Both South Dakota and West Virginia (and every other US state) require every LLC to designate a registered agent with a physical street address in the state of formation. You can serve as your own agent if you live in the state; otherwise a commercial agent runs $50 to $125 per year. Using your own home address makes it part of the public record.
Forming elsewhere does not escape your home state's tax. If you live and operate a business from your home state, forming the LLC in South Dakota or West Virginia does not avoid your home state's income tax. The moment you transact business at home, your home state requires a foreign LLC registration, and state tax liability follows your residence regardless of where the entity sits on paper.
EIN applications are free. The IRS issues Employer Identification Numbers directly at no cost. Any service charging you to "get your EIN" is reselling a free form submission. Single-member LLCs with no employees technically don't need one for federal tax, but nearly every bank requires an EIN to open a business account.
Operating agreement matters more than the state you pick. A well-drafted operating agreement governs member ownership, management, profit splits, buy-sell terms, and dissolution. Without one, your LLC runs on the state's default rules, which are rarely what you want. California, Maine, Missouri, and New York require a written one by statute; every other state treats it as strongly recommended.
Agency contacts
South Dakota Secretary of State - Business Services
- Website
- sdsos.gov
- Phone
- (605) 773-4845
- corpinfo@state.sd.us
- Capitol Building, 500 East Capitol Avenue, Suite 204, Pierre, SD 57501-5070
- Office
- 215 E. Prospect Avenue, Pierre, SD 57501
- Hours
- 8:00 AM to 5:00 PM Central, Monday to Friday
West Virginia Secretary of State, Business and Licensing Division
- Website
- sos.wv.gov/business
- Phone
- (304) 558-8000
- Business@wvsos.gov
- WV Secretary of State, Business and Licensing Division, One-Stop Business Center, 1615 Washington Street East, Charleston, WV 25311
- Office
- 1615 Washington Street East, Charleston, WV 25311
- Hours
- 8:30 AM to 5:00 PM Eastern, Monday to Friday
South Dakota Department of Revenue
- Website
- dor.sd.gov
- Phone
- (605) 773-3311
- 445 E Capitol Avenue, Pierre, SD 57501
- Hours
- 8:00 AM to 5:00 PM Central, Monday to Friday
West Virginia Tax Division
- Website
- tax.wv.gov
- Phone
- (304) 558-3333
- TaxHelp@wv.gov
- West Virginia Tax Division, P.O. Box 2389, Charleston, WV 25328-2389
- Office
- 1001 Lee Street East, Charleston, WV 25301
- Hours
- 8:00 AM to 5:00 PM Eastern, Monday to Friday
Frequently Asked Questions
-
Is it cheaper to form an LLC in South Dakota or West Virginia?
West Virginia is cheaper at formation ($100) than South Dakota ($150). Ongoing costs are also different: $125 vs $155 per year. Total over three years: $475 vs $615.
-
Can I form an LLC in South Dakota if I live in West Virginia?
Yes, but your West Virginia business will almost certainly need to register as a foreign LLC in West Virginia too, which means paying West Virginia's foreign registration fee and any ongoing West Virginia obligations on top of the South Dakota ones. The "form elsewhere to save" math usually doesn't work for operating businesses; it only works when you have no physical operations tied to any specific state.
-
How long does it take to form an LLC in South Dakota vs West Virginia?
South Dakota online: 1 business day; West Virginia online: 5 business days. South Dakota offers paid expedite from $50. West Virginia offers paid expedite from $25.
-
Which state has lower taxes for an LLC, South Dakota or West Virginia?
South Dakota: no state income tax, no entity-level franchise or LLC tax. West Virginia: state income tax applies to member-level pass-through income, no entity-level franchise or LLC tax.
-
Do both states require a registered agent?
Yes. Every US state (and DC) requires every LLC to maintain a registered agent with a physical street address in the state. South Dakota and West Virginia both have this requirement. You can serve as your own agent if you live in the state; most out-of-state filers use a commercial agent for $50 to $125 per year.
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Which state should I pick if I run an online business from home?
Form in the state you actually live in. Your home state's Department of Revenue treats your residence as nexus regardless of where the LLC is filed, which means you owe state income tax there anyway. Forming in South Dakota or West Virginia to escape your home state's tax doesn't work; it adds paperwork. The non-resident filings make sense when you genuinely operate nowhere in particular: international founders, purely passive holding entities, or real-estate LLCs owning property in other states.
Full state guides
More South Dakota and West Virginia comparisons
More South Dakota vs ...
Sources
- Filing fee: sdsos.gov/general-information/filing-fees.aspx · verified April 21, 2026
SD SoS filing fee schedule: Domestic LLC Articles of Organization filed electronically online is $150; filed via paper is $165 (includes the $15 paper filing fee). Online is the default; filingFee captures the online amount. - Expedited filing: sdsos.gov/general-information/filing-fees.aspx · verified April 21, 2026
SD SoS offers expedited processing for any filing at an additional $50 flat fee, defined as completion sooner than the normal course of business on request. Typical expedited turnaround is 24 hours. - Foreign LLC registration fee: sdsos.gov/general-information/filing-fees.aspx · verified April 21, 2026
Foreign LLC Certificate of Authority online filing fee is $750; paper is $765 (includes $15 paper filing fee). This is materially higher than the $150 domestic fee; South Dakota is one of the most expensive states for foreign LLC registration. - Operating agreement requirement: sdlegislature.gov/Statutes/47-34A · verified April 21, 2026
SDCL 47-34A (Uniform Limited Liability Company Act) defines an operating agreement under 47-34A-103 as any valid agreement, written or oral, governing relations among members, managers, and the LLC. The statute does not require the operating agreement to be in writing. - Publication requirement: sdlegislature.gov/Statutes/47-34A · verified April 21, 2026
SDCL 47-34A contains no newspaper publication requirement for LLC formation. Only NY, AZ, and NE require publication. - Annual report fee: sdsos.gov/general-information/filing-fees.aspx · verified April 21, 2026
SD SoS filing fee schedule: LLC Annual Report filed electronically online is $55; filed via paper is $70 (includes the $15 paper filing surcharge). Due first day of the anniversary month each year. - Franchise tax: dor.sd.gov/businesses/taxes/ · verified April 21, 2026
SD Department of Revenue confirms South Dakota does not impose a general corporate income tax or franchise tax. A narrow bank franchise tax applies only to financial institutions under SDCL 10-43. - Corporate income tax rate: dor.sd.gov/businesses/taxes/ · verified April 21, 2026
South Dakota has no corporate income tax. Field set to null. - Sales tax rate: dor.sd.gov/businesses/taxes/sales-use-tax/ · verified April 21, 2026
SD Department of Revenue: the state sales and use tax rate is 4.2%. Municipalities may impose up to 2% additional general sales tax. - Business name search: sosenterprise.sd.gov/BusinessServices/Business/FilingSearch.aspx · verified April 21, 2026
SD SoS Enterprise business information search. Use before filing Articles of Organization to confirm name availability. - Online filing portal: sosenterprise.sd.gov/BusinessServices/Business/RegistrationInstr.aspx · verified April 21, 2026
SD SoS Enterprise online business registration portal. Online LLC filings are typically approved immediately or within one business day; paper filings take about 3-5 business days plus mail transit. - Certificate of Formation form: sdsos.gov/docs/business/llc-domestic-articlesoforganization.pdf · verified April 21, 2026
Official Domestic LLC Articles of Organization fillable PDF published by the SD SoS, used for paper filings. - Filing fee: sos.wv.gov/register-new-wv-business · verified April 21, 2026
West Virginia Secretary of State Register a New WV Business fee schedule: Limited Liability Company (LLC/PLLC) domestic filing fee is $100.00. An additional $1.00 online processing fee applies to filings through the WV One Stop Business Portal, bringing the online total to $101. Initial SoS registration fee may be waived for veteran-owned businesses and West Virginia-resident young entrepreneurs (age 18 to 29). - Expedited filing: sos.wv.gov/business/general-information/expedite-service · verified April 21, 2026
West Virginia Secretary of State Expedite Service fee schedule: 24-hour $25.00, 2-hour $250.00, 1-hour $500.00. Expedite fees are in addition to the regular filing fee. Available for paper and online filings. 24-hour $25 tier reported as default expedited service. - Certificate of Formation form: sos.wv.gov/business/registration-and-waivers/register-new-wv-business · verified April 21, 2026
Form LLD-1 Articles of Organization of Limited Liability Company (revised 07/2025). PDF delivered from the WV Secretary of State media system at sos.wv.gov/media/282. Alternative filing path is the WV One Stop Business Portal at onestop.wv.gov. - Business name search: apps.wv.gov/SOS/BusinessEntitySearch/ · verified April 21, 2026
WV Secretary of State Business Entity Search. Use to confirm name availability before filing Articles of Organization. - Naming rules: code.wvlegislature.gov/31B-1-105/ · verified April 21, 2026
WV Code §31B-1-105 (Uniform Limited Liability Company Act): sets LLC naming requirements including the required designator ('limited liability company,' 'LLC,' 'L.L.C.,' 'PLLC' for professional LLCs) and distinguishability from existing names on file with the Secretary of State. - Operating agreement requirement: code.wvlegislature.gov/31B-1-103/ · verified April 21, 2026
WV Code §31B-1-103(a): members of an LLC may enter into an operating agreement, which need not be in writing, to regulate the affairs of the company. West Virginia statute does not require LLCs to adopt a written operating agreement; the chapter's default rules govern when none exists. Recorded as not required. - Publication requirement: code.wvlegislature.gov/31B-2-202/ · verified April 21, 2026
WV Code Chapter 31B (Uniform Limited Liability Company Act) contains no newspaper publication requirement for LLC formation. Not required. - Foreign LLC registration fee: sos.wv.gov/business/registration-and-waivers/register-out-state-foreig… · verified April 21, 2026
West Virginia Foreign Registration fee schedule: Limited Liability Company (LLC/PLLC) foreign registration fee is $150.00. An additional $1.00 online processing fee applies to online filings. Form LLF-1 Application for Certificate of Authority is used for out-of-state LLCs registering to do business in WV. - Annual report fee: sos.wv.gov/business/updates-and-changes/annual-reports · verified April 21, 2026
WV Code §59-1-2a and WV Secretary of State Annual Reports page: annual report filing fee is $25.00, due between January 1 and June 30 each year following the calendar year of registration. Online filing through the WV One Stop Business Portal is mandatory for most entities (since 2019). Failure to file by June 30 may trigger penalties and administrative dissolution or revocation. - Franchise tax: tax.wv.gov/Business/CorporateIncomeTax/Pages/CorporateIncomeTax.aspx · verified April 21, 2026
West Virginia's general Business Franchise Tax was fully phased out effective January 1, 2015. The Business and Occupation (B&O) Tax in WV Code Chapter 11 Article 13 applies only to specific industries (electric power, natural gas storage, water utilities, certain telecom and synthetic-fuel operations under §§11-13-2d through 11-13-2o), not to general LLCs. Local municipal B&O taxes under Chapter 8 Article 13 are separate and vary by city. Recorded at the state level as applies: false. - Corporate income tax rate: code.wvlegislature.gov/11-24-4/ · verified April 21, 2026
WV Code §11-24-4(a)(8): flat corporate net income tax rate of six and one-half percent (6.5%) on West Virginia taxable income for taxable periods beginning on or after January 1, 2014. Applies to C-corporations and to LLCs electing C-corp treatment. - Sales tax rate: tax.wv.gov/Business/SalesAndUseTax/Pages/SalesAndUseTax.aspx · verified April 21, 2026
West Virginia Tax Division Sales and Use Tax: statewide rate is 6.0%. Most municipalities impose an additional 1% municipal sales and use tax (combined 7% in those cities). Granville, Ronceverte, and Welch begin imposing 1% municipal sales and use tax effective July 1, 2026. Annual sales tax holiday runs from the Friday before the first Sunday in August through the following Monday.