Trying to avoid a business license. I have an online service business.

Asked almost 2 years ago - Sioux Falls, SD

Dear Sir/Madam -

I offer small time website content development services online. I also do some web design online ONLY.

I want to set up a S Corp (this issue has been decided to save on self employment taxes) in a state where there is no business license for my kind of business: online service business.

So far I see that Nevada while all good (no personal/corporate tax/franchise tax), has a compulsory business license of $200 per year, which at my level is high.

South Dakota does not list any business license for me …

Please help, with a state from among the ones with no corporate or personal taxes only: Alaska, Florida, Nevada, New Hampshire, Tennessee, Texas Washington and Wyoming.

I can incorporate anywhere.

BTW My stupid city wants all kinds of paperwork ...

Best -

Attorney answers (2)

  1. Robin R Gregory

    Contributor Level 5


    Lawyers agree

    Answered . South Dakota does not require a business license but if you have sales, there is a sales tax and you will need to obtain a sales tax license, for free, and make monthly reports and deposits to the South Dakota Dept of Revenue. If you wish to organize your business as an S Corp in South Dakota you will need to file with the Secretary of State at a one-time cost of $150.00 (you can find the forms online.) You will also be required to file an annual report with a yearly fee of $50.00. Of course you will need to fill out the proper form with the IRS in order to be classified as an S Corp instead of the default classification of C Corp. A popular business form for a small business is an LLC (Limited Liability Company) because you do not have to have board members or annual board meetings as required with a corporation. With an LLC you can still file the proper form with the IRS in the limited time frame and be classified as an S Corp for tax purposes. If you do not understand these options, you may wish to consult with a business attorney who may help you with the forms you need.

    I am not your attorney and as such I cannot give you legal advice. Also, I do not know all the particulars of your... more
  2. Andrew Mark Jaffe


    Contributor Level 17

    Answered . You do not need to live an a state to incorporate a business there. Use your browser to find one of the hundreds of web sites that do cheap incorporations and call them on the phone. They can advise you about the cheapest state to incorporate in.
    Andrew M. Jaffe
    Attorney at Law
    Practice Limited to E-Commerce and Internet Law

    This post is provided for general informational purposes only and is not intended to be legal advice specific to... more

Related Topics

E-commerce small business

E-commerce (short for “electronic commerce”) refers to business which is conducted using computer networks, most typically the Internet.

Gregory James Glaser

Start-Up Website Legal Documents

This quick guide will briefly identify some common documents utilized by new online start-ups: Terms of Use You post this document online to cover the terms on which your site users are... more

Small business c-corporation

A C corporation is taxed separately from its owners. Earnings and profits distributed to the corporation's owners are taxed as dividends.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.


Ask now

17,903 answers this week

2,387 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

17,903 answers this week

2,387 attorneys answering