Licenses and permits in South Dakota

The Secretary of State filing is not a license to do the work. What you need depends on the activity and on the city. Start with the sales tax license if you sell, the contractor’s excise tax license if you build, and the board that regulates your trade.

What’s different in South Dakota

• Selling and building are tax licenses, not a general business license. The occupational-board list does not include a general contractor board.
• Electricians and plumbers are licensed statewide. Plumbing licenses expire on December 31.
• Cottage food can be sold from home, in person. Internet sales are outside that exemption. The health department’s guide sets no dollar cap.
• Alcohol retail licenses are local. The state page sets a floor and a renewal cap. It does not set one price for every city.

Do this

1. Read the list of occupational licensing agencies. The Department of Labor and Regulation publishes a list of occupational licensing agencies and points general startup questions to the Governor's Office of Economic Development¹. The list names boards for trades such as accounting, cosmetology, nursing, engineering, and real estate. It names the Electrical Commission and the Plumbing Commission. It does not name a general building-contractor board. A city building permit is not on that list.* Ask the city and the county where you will work.
2. If you sell taxable products or services, get the sales tax license first. Get your tax IDs has the rate, the city add-on, and the application. The company filing does not issue that license.
3. If you build, get a contractor’s excise tax license before the work starts. The license is for anyone who contracts for construction services, or who builds, installs, or repairs a fixture to real property. The rate is 2%⁴ of gross receipts, and those receipts include the tax collected from the customer. Apply in the same tax license application as sales tax. The department’s license requirements tax fact says there is no fee for this license either. A prime contractor gives each subcontractor an exemption certificate for that project. The excise-tax page says a blanket certificate is not enough. The license tax fact also says someone who regularly hires others to repair, maintain, or improve property they own does not need a contractor's excise tax license⁹.
4. If the work is electrical or plumbing, get that license too. The Plumbing Commission’s applications and renewals list the appropriate form. The Electrical Commission licenses all electricians in the state². Renewals are posted on the commission’s site. The Plumbing Commission licenses plumbers and the related installer trades. Plumbing licenses expire every December 31. The one-month grace period is no longer in effect³. The plumbing page says continuing education is required before a 2027 renewal for contractors, plumbers, and third-year apprentices who were licensed by exam. Each license type has its own application form, and the form prints its fee. Use the fee on the form for your license type.
5. Selling food from home? Read the farmers market and cottage-food guide. The license exemption covers specific foods sold directly to the buyer from a home, a farmers market, or a similar temporary stand. Meat, poultry, jerky, fish, dairy, honey, and eggs are not in the cottage-food exemption. Canned, fermented, frozen, and temperature-controlled baked foods need an approved food-safety course every five years, or a written check of each recipe by a processing authority. Canned food on that page has to meet a pH or water-activity limit. There is no dollar limit on those direct sales. The seller, or someone who lives there, may deliver the food. Wholesale, a retail store, and internet sales are indirect and need a state license. A spring 2024 Department of Revenue newsletter says people selling homemade food from their home need a sales tax license⁶. The guide’s food table says other prepared food and drink, such as sandwiches, casseroles, hot dishes, and stews, needs a state license⁵, so a restaurant that serves meals on site is not this exemption. Ask the Department of Health about that license before you open one.
6. Selling alcohol? Start with the liquor license page. Ask the city finance officer about an on-sale license inside city limits, including whether one is available and what it costs. Ask the county auditor for an on-sale license outside city limits. For package sales, the table shows $300 as the least the license may be, for each city-size row, and no more than $500 on a renewal. Malt beverages, or wine from a South Dakota farm winery, sold on or off the premises are $300, paid to the local government. A liquor wholesaler pays the Department of Revenue $5,000, and files a surety bond of $50,000. A wholesaler of malt beverages only pays $400⁷. Maker licenses, such as a distillery or a microbrewery, are on the department’s manufacturer page. Use the row for the license you are applying for.
7. Keep the company record and the license separate. A trade license does not form the LLC. Register your business is the formation step. A name that contains TRUST needs approval from the Division of Banking and cannot be filed online¹⁰.

What you get back

A sales tax license if you sell taxable products or services, a contractor’s excise tax license if you build, a trade license if your work is on the state list, a cottage-food setup if you sell from home, and a local alcohol license if you sell drinks. Each one renews on its own date. The December 31 date is the plumbing license. It is not the sales tax license and not the alcohol license.