How to Start a Nonprofit in South Dakota: A Step-by-Step Guide

South Dakota nonprofit corporation requirements also state that the name cannot imply the organization is organized for a purpose other than what the articles state. Words like "bank," "insurance," or "trust" may trigger additional state approval requirements. Unlike many states, South Dakota doesn't require a nonprofit's name to include an identifier like "corporation" or "incorporated," though adding one signals formal legal status. Read more in our comprehensive guide to South Dakota business names.

If you want to lock in a name while you prepare the information for your formation paperwork, South Dakota lets you apply for a name reservation, which costs $25 and reserves it for 120 days. 

Step 2: Appoint a registered agent

According to South Dakota nonprofit law, every South Dakota nonprofit must have a registered agent—a person or an entity designated to receive legal documents and official state correspondence.

To qualify as a registered agent in South Dakota, a person or entity must meet the following requirements:

• Have a physical street address in South Dakota. P.O. boxes do not qualify.
• Have full availability during normal business hours. The agent must be available at their registered office during all regular business hours.
• Must be a qualifying individual or entity. A registered agent can be any adult who resides in South Dakota, including the business owner, an employee, a friend, or a family member. A business entity authorized to do business in South Dakota or a commercial registered agent can also serve.
• Current, accurate information on file with the Secretary of State. Your registered agent's name and physical address must stay accurate in state records from formation until dissolution. 

If you act as your own registered agent, be aware that you must be present at your registered address during all business hours and may be served legal papers in front of clients or coworkers. A professional service, like LegalZoom’s registered agent service, keeps a personal address off public filings and ensures that someone is always available. 

Step 3: Choose your incorporators and initial nonprofit board of directors in South Dakota

Incorporators fill out, sign, and file the articles of incorporation. A minimum of one is required. They do not need to be directors or members.

South Dakota nonprofit board requirements mandate a minimum of three directors (who do not need to be South Dakota residents) and that the first board must be named in the articles. The board appoints officers with terms and duties governed by the bylaws. Most organizations appoint at least a president, secretary, and treasurer.

When the IRS reviews a 501(c)(3) application, it looks closely at whether a majority of directors are independent—meaning no family or financial relationships with one another or with the founder. Building an independent board from the start reduces the risk of the IRS flagging private benefit concerns.

Step 4: File articles of incorporation with the South Dakota Secretary of State

The filing and approval of articles of incorporation officially creates your nonprofit corporation in South Dakota. 

You can either file online through the Secretary of State’s website, or you can submit a paper application along with payment. The nonprofit filing fee in South Dakota is $30. The Secretary of State typically processes online applications immediately and paper filings within one to three days. 

Your articles need to include the following: 

• Name of the nonprofit corporation
• Statement of purpose (the charitable purpose clause)
• Period of existence
• Whether the nonprofit corporation will have members
• Principal office address
• Registered agent name and South Dakota street address
• Name and address of each incorporator
• Name and address of each initial director (at least three)
• Dissolution clause

Certain language in the articles directly determines whether the IRS will approve your 501(c)(3) application:

• The charitable purpose clause must state that the organization is organized exclusively for one or more exempt purposes listed in the Internal Revenue Code, Section 501(c)(3). Example language: "This corporation is organized exclusively for charitable, educational, and scientific purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code."
• The dissolution clause specifies where assets go if the organization shuts down. The IRS requires remaining assets be distributed to another 501(c)(3) or a government entity—not returned to founders. Example language: "Upon dissolution of this corporation, assets remaining after payment of liabilities shall be distributed to one or more organizations described in Section 501(c)(3) of the Internal Revenue Code, as selected by the board of directors."

Missing or vague purpose and dissolution language is a common reason why the IRS rejects 501(c)(3) applications. Make sure that those clauses are in your articles to avoid costly delays to your tax-exempt approval.

Step 5: Draft nonprofit bylaws and hold your organizational meeting

Bylaws are the internal rulebook of your nonprofit, governing how the board operates and how decisions get made. They are not filed with the South Dakota Secretary of State, but they are not optional either. The IRS requires a copy as part of your 501(c)(3) application.

Here’s what your nonprofit bylaws in South Dakota should include:

• Organization name and principal office address
• Statement of purpose
• Membership rules, or a clear statement that the organization has no members
• Board of directors, including number of seats, term lengths, election process, and removal procedures
• Officer titles, duties, and election process
• Meeting rules, including frequency, notice requirements, and quorum definition
• Voting procedures
• Conflict of interest policy (the IRS specifically asks whether this exists on both application forms)
• Amendment procedures
• Recordkeeping and financial controls

Learn more in our guide about how to write nonprofit bylaws. 

The organizational meeting is the first formal gathering of the initial board after the articles of incorporation are approved. The board adopts the bylaws, elects officers, and ratifies any pre-incorporation actions. Keep written minutes of all director meetings, as grant-makers and banks may ask to see them.

Step 6: Get an EIN for your nonprofit in South Dakota

An employer identification number (EIN) is a nine-digit number that the IRS assigns to identify your organization for tax purposes. You need it to open a bank account, hire employees, and file your 501(c)(3) application.

You can apply for an EIN either through the IRS’ website, or you can have LegalZoom’s EIN service file the necessary application paperwork for you so that you can focus on other necessary business tasks.

Step 7: Apply for 501(c)(3) status with the IRS

Learning how to get 501(c)(3) status in South Dakota is fairly straightforward once you know which application you need to file. The right form depends on your organization's size and type:

• Form 1023-EZ is available to organizations with projected gross receipts of $50,000 or less and total assets of $250,000 or less, excluding churches, schools, hospitals, supporting organizations, and several other categories. The IRS requires you to complete an eligibility worksheet first, and a single "yes" answer means you must use the standard Form 1023. The filing fee for Form 1023-EZ is $275, and processing takes approximately 22 days.
• Form 1023 (full application) is required if your organization exceeds either size threshold or falls into an excluded category. The filing fee is $600, and processing can take up to six months.

Some eligible organizations file the full Form 1023 anyway. A complete application produces a more detailed determination letter, which some grant-makers prefer. If significant foundation grants are part of your plan, consult an attorney about which form better positions your organization.

Here’s what the IRS looks for in a 501(c)(3) application:

• Purpose. Does your organization genuinely qualify as a charitable, religious, educational, scientific, or similar organization under Section 501(c)(3)?
• Organizational documents. The IRS checks that your articles of incorporation contain the required charitable purpose and dissolution language from Step 4. You must upload your articles, including any amendments, as a required attachment.
• Bylaws and conflict of interest policy. The IRS asks whether your organization has adopted a conflict of interest policy. Submitting bylaws without one is a common, easily avoidable cause of delay.
• Description of activities. You must explain what your organization does, including its programs, the population it serves, and how each activity furthers the exempt purpose. Vague descriptions are one of the most frequent reasons the IRS requests additional information or denies an application.
• Financial information. New organizations provide projected budgets. If approved, the IRS issues a determination letter describing your tax-exempt status, qualification to receive tax-deductible contributions, foundation classification, and annual filing requirements.
• Board composition. The IRS scrutinizes whether a majority of directors are independent and unrelated. All nonprofits must operate exclusively for a recognized exempt purpose and use assets for a public purpose, not private gain.

Federal income tax exemption kicks in automatically when the IRS issues your determination letter, exempting income earned from activities related to your exempt purpose and allowing donors to deduct contributions.

Step 8. Apply for South Dakota nonprofit tax exemptions

South Dakota state income tax is a non-issue. South Dakota imposes no corporate income tax on any entity, so there is no state income tax exemption application to file.

However, the state does impose sales and use tax, for which your nonprofit can apply for an exemption. South Dakota sales and use tax exemption requires a separate application to the South Dakota Department of Revenue—501(c)(3) status does not confer it automatically. To gain state tax-exempt status for nonprofits in South Dakota, you’ll need to include your EIN, organization type, physical and mailing address, bylaws, articles of incorporation, and potentially your IRS determination letter. There is no filing fee.

Organizations that qualify for the exemption must renew their exemption certificate every five years. 

Is nonprofit charitable solicitation registration in South Dakota required?

Unlike many other states, South Dakota does not require nonprofits to register before soliciting donations. Your organization can fundraise—online, by direct mail, or in person—without registering with any state agency.

One exception: Paid solicitors conducting telephone campaigns on behalf of a charity must register with the South Dakota Public Utilities Commission and file a bond with the South Dakota Attorney General. This obligation falls on the paid solicitor, not the nonprofit organization. Learn more about the requirements for paid solicitors, and confirm that any solicitor you engage to conduct telephone campaigns satisfies these requirements before any calls go out.

South Dakota's no-registration rule only covers solicitation activity within the state. Multistate fundraising compliance varies and may require separate registration in each state.

Ongoing nonprofit compliance in South Dakota

Learning how to start a nonprofit in South Dakota and apply for tax exemptions launches your organization, but there are ongoing compliance tasks for properly maintaining your nonprofit. 

South Dakota annual report

All South Dakota nonprofits must submit an annual report each year. The deadline is tied to when you submitted South Dakota nonprofit formation documents. So, if you incorporated in July, your report is due every July 1. Nonprofits that miss the deadline may be listed as delinquent and risk administrative dissolution. 

You can file your annual report for a nonprofit in South Dakota online through the Secretary of State’s website or by mail. The filing fee for both methods is $10. 

IRS Form 990

Most 501(c)(3) organizations must file an annual information return with the IRS even in years with no income or activity. The form depends on size:

• Form 990-N (e-Postcard). Gross receipts of $50,000 or less.
• Form 990-EZ. Gross receipts under $200,000 and total assets under $500,000.
• Form 990 (full form). Gross receipts of $200,000 or more, or total assets of $500,000 or more.

Form 990 (all three types) is due by the 15th day of the fifth month after the close of your tax year. Three consecutive missed filings trigger automatic revocation of tax-exempt status. Reinstatement requires reapplying for 501(c)(3) status with the IRS and paying the application fee again.

Registered agent

Keep your registered agent information current with the Secretary of State. A statement of change of registered office or agent must be filed promptly to avoid missing legal or government notices.

Recordkeeping

Maintain written minutes of every board meeting, financial records, copies of all filed returns, and core governance documents. Grant-makers, banks, and auditors routinely request them. Good recordkeeping also protects director liability by documenting that decisions were made properly.

State sales tax exemption renewal

If your organization received a sales and use tax exemption permit from the South Dakota Department of Revenue, mark the five-year renewal date immediately. Missing it means that your exemption lapses until you reapply.

How long does it take to start a nonprofit in South Dakota?