South Dakota vs Texas LLC Cost (2026): $200 vs $300
Side-by-side LLC formation cost comparison for South Dakota and Texas: filing fees, annual report costs, processing time, and tax implications.
Forming an LLC in South Dakota costs $200 in year one — $100 cheaper than Texas ($300).
South Dakota
Lower CostTexas
Full LLC Cost Comparison: South Dakota vs Texas
| Factor | South Dakota | Texas |
|---|---|---|
| State filing fee (one-time) | $150 | $300 |
| Annual report fee | $50 / per year | None |
| Processing time | 3–5 business days | 1–3 business days |
| State income tax | No income tax | No income tax |
| First-year total | $200 | $300 |
South Dakota saves you $100 in year one compared to Texas.
South Dakota LLC Notes
South Dakota has no state income tax, making it popular for online businesses.
Texas LLC Notes
Texas has no personal income tax. LLCs file an annual franchise tax report if revenue exceeds $2.47M.
Which State Should You Actually Use?
For most small businesses, form your LLC where you actually do business — not where the filing fee is cheapest. If you operate in South Dakota, form there. If you operate in Texas, form there.
- Forming in your home state: Simpler compliance, no registered agent needed in another state, no foreign qualification fees.
- Forming in Wyoming or Delaware: Makes sense for investor-backed startups, multi-member LLCs with complex ownership structures, or businesses operating in multiple states.
- Key cost trap: If you form in Texas but operate in South Dakota, you'll pay both states' fees — eliminating any savings.
Compare More LLC Formation Costs
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