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.
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 and others.
Aberdeen – The Aberdeen City Hall issues business licenses to certain businesses such as kennels, garbage haulers, home day care provider, lumbers and others.
Employer Identification Number (EIN) – Many businesses will register with the Internal Revenue Service (IRS) for an EIN or Employer Identification Number. The EIN is the business equivalent for 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.
South Dakota 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 from the Department of Revenue.
There is no cost for this license.
Resale Certificate – Businesses purchasing merchandise to resell will usually want to obtain an South Dakota Resale Certificate in order to not pay sales tax for merchandise that is being resold to customers.
South Dakota 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 cost 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.
Fictitious Name Registration – While not a business license, it’s common for Sole Proprietorships and Partnerships operating under a 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 a few of the most common business licenses, but there are way too many licenses and permits in South Dakota for us to keep track of. Before starting your business, check with the City Hall, County Clerk, Chamber of Commerce and/or Economic Developer in your area to get more information regarding business licensing. Additionally, there are companies like IncFile or CorpNet that can do the research to ensure you have the proper federal, state and local licenses.