What Business Licenses and Permits are Needed in South Dakota?

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Quick Reference

Starting a business in South Dakota will mean potentially registering with a number of federal, state, and local agencies.  Let’s take a look at common licenses and permits a business will register for in South Dakota.

Before applying for any licenses, the business entity will first need to be established. Learn more about the differences between the sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).

Related: Comparison of Business Entities

General Business License

There is no general state of South Dakota business license, however, many cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and what the business does.  Below are a few cities that have licensing requirements. 

Sioux Falls – The Sioux Falls Licensing Office requires certain types of businesses to register, such as businesses serving alcohol, mobile food vendors, bowling centers, shooting galleries, and a few others.

Rapid City Certain businesses in Rapid City, require a business license, including contractors, taxis, security companies, etc.

Aberdeen – The Aberdeen City Hall issues business licenses to certain businesses such as kennels, garbage haulers, home day care providers, lumbers, etc. 

Building & Zoning Permits

ZoningDepending on the location of the business, it’s important to verify whether the business needs an occupancy permit or has specific zoning ordinances to follow. Depending on city requirements, home-based businesses may need to apply for a home occupation permit.

Building Permit – A building permit may be needed from the city or county building and planning department if there is any construction or renovations to a facility.

Signage Permit – Some municipalities require a permit before adding signage.

Sales Tax License

Any retailer selling, renting, or leasing tangible personal property or products delivered electronically or providing certain services in South Dakota will need to register for a South Dakota Sales Tax License (also called a sales tax permit) from the South Dakota Department of Revenue.

There is no cost for this license.

Resale Certificate

Businesses purchasing merchandise to resell will usually want to obtain a South Dakota Resale Certificate to not pay sales tax for merchandise that is being resold to customers.

Contractor Excise License

Any person entering into a contract for construction services must have a South Dakota contractors’ excise tax license. Construction services include the construction, building, installation, and remodeling of real property.

More information about the Contractors Excise License is available from the Department of Revenue.

There is no fee for this license.

Professional License

A variety of professions in the state are regulated and need to be registered before offering certain services.  A few common professions that require licensing in South Dakota include; architects, plumbers, barbers, and many more.   Additional information, fees, and licensing requirements for professions are available from the South Dakota Department of Labor & Regulation.

In addition to professional licensing from the South Dakota Department of Labor & Regulation, there are a few other types of businesses that also need licensing, such as food establishments and daycares.

Employer Identification Number (EIN)

Many businesses will register with the Internal Revenue Service (IRS) for an EIN (also referred to as a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent of a Social Security Number for an individual. Corporations, Limited Liability Companies, Partnerships, and Sole Proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.

There is no cost for an EIN, and it only takes a few minutes to get.

Learn how to apply for an EIN

Fictitious Name Registration

While not a business license, it’s common for Sole Proprietorships and Partnerships operating under a business name that is different from the full name of the owner(s) to register for a Fictitious Name (also known as a Doing Business As or DBA) with the Register of Deed’s Office in the county where the business is located.

 

These are just some of the most common business licenses a new business will need to register before starting. Before starting your business, be sure to check with City Hall, County Clerk, Chamber of Commerce, and/or Economic Developer in your area to get more information regarding business licensing.

For some additional peace of mind, companies like IncFile or CorpNet can do the research and ensure you have all of the proper federal, state, and local licenses to start your business.