How to Get an EIN for an LLC in South Dakota

The Internal Revenue Service (IRS) uses your business’s employer identification number (EIN) to identify your company, much the way a Social Security number is used to identify individuals. 

When you form a limited liability company (LLC) in South Dakota, you’ll almost certainly need to obtain an EIN, mainly used for tax filing purposes. 

Do I Need an EIN?

If your LLC has more than one member or if you are going to hire employees, you’ll need an EIN. But these aren’t the only factors. The IRS offers a test to determine if you need an EIN:

• Do you have employees?
• Do you operate your business as a corporation or a partnership?
• Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco, and Firearms?
• Do you withhold taxes on income, other than wages, paid to a non-resident alien?
• Do you have a Keogh plan?
• Are you involved with any of the following types of organizations?
  • Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
  • Estates
  • Real estate mortgage investment conduits
  • Non-profit organizations
  • Farmers’ cooperatives
  • Plan administrators

If you answer yes to these questions, your business needs an EIN.

Benefits of Having an EIN

There are several reasons to get an EIN, even if you’re not required to have one. 

First, opening a business bank account is often required, and it adds a degree of separation between your business and personal finances. Bankers, creditors, and the IRS will identify your business by its EIN rather than your personal Social Security number. 

Second, it helps establish business credit, boosting your access to financing. Third, if you end up hiring employees in the future, you’ll already have your EIN and be ready to go. 

What Do I Need to Get an EIN in South Dakota?

According to the IRS:

When you fill out the application, you’ll need the following:

• DBA name, if you have one
• Name, title, and Social Security number of managing member or owner
• Business address
• State in which your business is registered
• Reason for applying
• Main business activity
• Products/services offered 
• Closing month of your accounting year
• Contact phone number and email

How to Apply for an EIN in South Dakota

The application is Form SS-4, and you can submit it via the IRS website. Alternatively, you can print the form and fax or mail it. If you apply online, your EIN will be issued immediately. 

There is no cost to obtain an EIN, which never expires.

Register for South Dakota Taxes

You also may need to register for business taxes in South Dakota. 

You don’t need to register to withhold income tax if you have employees, as South Dakota has no state personal income tax. However, you need to register for unemployment taxes with the Department of Labor and Regulation.

If you sell goods or services subject to sales tax, you’ll need to register to collect and pay sales tax with the Department of Revenue. 

Your local government may also require certain tax registrations. 

Conclusion

Even if your LLC does not need to obtain an EIN in South Dakota, getting one is probably the best move for your business, its finances, and its future. Just be sure to fill out the forms correctly and keep your business on the path to success.