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franchise tax

A franchise tax is a state tax on businesses and other entities (corporations, limited liability companies, trusts, etc.) that are formed in or doing business in a state.

A franchise tax is said to be a tax on the privilege of doing business in a state and is sometimes referred to as a privilege tax. The amount of tax due is often calculated as a percentage of a business’s income, for example.

In South Dakota, there is no franchise tax imposed on businesses. This means that corporations, limited liability companies, partnerships, trusts, and other entities are not required to pay a tax simply for the privilege of doing business within the state. South Dakota is known for its business-friendly tax climate, and the absence of a franchise tax is one aspect that contributes to this reputation. Instead of a franchise tax, businesses must comply with other state tax obligations, such as sales and use taxes if applicable, but they do not face a tax on their existence or operation within the state's borders.

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Taxes

franchise tax

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Taxes

franchise tax

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