The Swier Law Firm Corporate and Business Law FAQs
Have questions? We have answers! Our South Dakota attorneys answer the questions they hear most often from clients just like you.
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South Dakota Tax Law: Why Can Madonna Write Off Her Work Clothes, But I Probably Can’t?
The tax code allows a deduction for work clothes, but usually only if:
- You wear them as a condition of your employment; and
- The clothes are not suitable for everyday wear.
Firefighters, health care workers, letter carriers, and law enforcement officers qualify for this deduction. Musicians and entertainers (like Madonna) can also deduct their clothes which aren't suitable for everyday wear.
Why would I want to form a South Dakota Limited Liability Company?
For many businesses in Sioux Falls and throughout South Dakota, a Limited Liability Company (LLC) is an excellent business entity choice.
First, a South Dakota LLC offers protection from personal liability for business debts (just like a corporation).
Second, unlike a corporation, which must pay its own taxes, an LLC is a "pass-through tax entity." This means that the profits and losses of the business pass through to its owners, who report them on their personal tax returns just as they would if they owned a partnership or sole proprietorship.
Finally, although setting up an LLC is more difficult than creating a partnership or sole proprietorship, running one is significantly easier than running a corporation.
How many people do I need to form a South Dakota Limited Liability Company (LLC)?
In South Dakota, you can form an LLC with just one owner.
South Dakota Business Law: What are the standard mileage rates for 2016?
The Internal Revenue Service recently issued the 2016 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 54 cents per mile for business miles driven, down from 57.5 cents for 2015
- 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
- 14 cents per mile driven in service of charitable organizations
South Dakota Tax Law: What are the Standard Mileage Rates for 2014?
Beginning on January 1, 2014, the standard mileage rates for the use of an automobile will be:
- 56 cents per mile driven for business miles;
- 23.5 cents per mile driven for medical or moving; and
- 14 cents per mile driven for charitable organizations.
Is South Dakota an employment-at-will state?
Yes. South Dakota is an employment-at-will state.
Does South Dakota have a state corporate income tax?
No. South Dakota does not have a state corporate income tax.
Does South Dakota have a state personal income tax?
No. South Dakota does not have a state personal income tax.
Who supervises corporations in South Dakota?
The South Dakota Secretary of State supervises corporations.
Both non-profit and for-profit corporations must be registered with the Secretary of State's Office. Out-of-state corporations must be registered before doing business in South Dakota.
What are the 5 steps needed to form a South Dakota LLC?
Here are 5 steps needed to form a South Dakota Limited Liability Company (LLC):
Step #1 - Choose the LLC's Name
South Dakota law requires that an LLC's name include the words "Limited Liability Company" or "Limited Company," or the abbreviations "L.L.C.," "LLC," "LC," or "L.C."
Step #2 - File the LLC's Articles of Organization
A South Dakota LLC is created by filing Articles of Organization with the Secretary of State. These Articles of Organization must include:
- the LLC's name and address;
- the name and address of the LLC’s registered agent;
- whether the LLC will be member-managed or manager-managed;
- if the LLC is manager-manged, the managers' names and addresses must be provided;
- the name and address of each organizer;
- the LLC's duration, if not perpetual; and
- whether one or more of the members of the company are to be liable for its debts and obligations under § 47-34A-303(c).
Step #3 - Pay the LLC's Filing Fee
As of July 1, 2014, the filing fee in South Dakota is $150.00.
Step #4 - Appoint the LLC's Registered Agent
Every South Dakota LLC must have a registered agent for service of process in the state. This is the person or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent must have a physical street address in South Dakota.
Step #5 - Prepare the LLC's Operating Agreement
Although an LLC Operating Agreement is not required in South Dakota, it is good practice to have one. The Operating Agreement serves as your LLC's "rule book" and provides necessary structure for the business.