The Complete Guide to South Dakota Business Licenses
South Dakota does not have a general business license. Sellers get a free sales tax license, contractors get a free excise tax license, and cities license specific trades and activities. This guide explains each step for a new South Dakota business.
Step 1: Form the LLC
File Articles of Organization with the Secretary of State for $150 online. The annual report is $55 online. See the South Dakota LLC guide for every formation step.
Step 2: Free sales tax license
Apply online with the South Dakota Department of Revenue. There is no fee for a sales tax license. The state rate is 4.2%, and most cities add a municipal tax of 1–2%.
Step 3: City licenses
Not every business needs a city license. Sioux Falls, for example, licenses contractors, peddlers, alarm businesses and pawn shops. Check zoning with your city.
Step 4: Contractors and professional licenses
Contractors register for a contractor's excise tax license with the Department of Revenue, which is also free. Cities may license contractors locally, and state boards license many professions and trades.
Hiring staff and DBAs
Employers register for Reemployment Assistance (unemployment insurance) with the Department of Labor and Regulation. To trade under another name, file a fictitious business name statement; county Register of Deeds offices charge about $10, and the filing lasts five years.
Checklist
| Registration | Agency | Cost |
|---|---|---|
| Articles of Organization | Secretary of State | $150 online; $55 annual report |
| Sales tax license | Department of Revenue | Free |
| Contractor's excise tax license | Department of Revenue | Free |
| City licenses | Your city (e.g. Sioux Falls) | Set locally |
Frequently Asked Questions
Does South Dakota require a business license?
No. South Dakota has no general business license. Sellers get a free sales tax license, and cities license specific trades.
How much is a sales tax license in South Dakota?
It is free. The state rate is 4.2%, and most cities add 1–2%.
Do contractors need a license in South Dakota?
Contractors register for a free contractor's excise tax license with the Department of Revenue; cities may also license them.
How much does it cost to form an LLC in South Dakota?
The Articles of Organization cost $150 online, and the annual report is $55 online.
Does South Dakota have income tax?
No. South Dakota has no state income tax.