How do I get a business license?

South Dakota Secretary of State (entity formation) / South Dakota Department of Revenue (tax registration) / Local municipality for local licenses

Step by Step

How to do it

Determine your business structure: sole proprietor, LLC, corporation, partnership
Register your business entity with the SD Secretary of State (for LLCs, corporations, and LPs) - file online at sdsos.gov (SD SOS Business Entity registration portal); SD offers streamlined online filing
Obtain an EIN from the IRS at irs.gov
Register with the South Dakota Department of Revenue for applicable state taxes at dor.sd.gov:
- SD Sales Tax License (if selling taxable goods/services in South Dakota): required; $0 fee
- SD Withholding Account (if hiring employees): required
- NOTE: SD has NO state income tax (individual or corporate) - no state income tax registration needed
Register at dor.sd.gov/businesses
File a REGISTERED BUSINESS NAME (if doing business under a name other than legal entity name) - file a Statement of Trade Name or Fictitious Name with the SD Secretary of State if needed
Check with your city or municipality for LOCAL BUSINESS LICENSES: some SD cities require local business licenses; Sioux Falls, Rapid City, and Aberdeen may have local licensing requirements; contact your city
Check for industry-specific state licenses: contractors (SD Contractor License - contact SD Department of Labor; no general statewide contractor license but electrical, plumbing, HVAC require state licenses); healthcare professionals, real estate, cosmetologists through the SD Department of Labor and Regulation (dlr.sd.gov); alcohol/beverage licenses through SD DOR
Renew entity annual report with SD SOS; renew applicable licenses

Details

What you need to know

Required Docs

Business name and type of activity
SD business address and registered agent
Entity formation documents
EIN or SSN
Industry-specific certifications

Fee

LLC formation: $150 (online); corporation: $150 (online); ANNUAL REPORT: $50 (LLC and corporation - moderate); Sales Tax License: free; local license: varies; no state income tax registration RENEWAL: Annual report due by the first day of the second month following your fiscal year end (or anniversary month); for most calendar-year entities: due in January or February; verify at sdsos.gov ONLINE OPTION: Yes - sdsos.gov (entity formation and annual reports); dor.sd.gov (tax registration) WHERE TO GO: SD Secretary of State (entity formation); SD DOR (sales tax/withholding); City Hall (local license); SD DLR (professional/occupational licenses)

Online Option

Yes - sdsos.gov (entity formation and annual reports); dor.sd.gov (tax registration)

Where to Go

SD Secretary of State (entity formation); SD DOR (sales tax/withholding); City Hall (local license); SD DLR (professional/occupational licenses)

County-specific variations apply

SD cities independently administer local business licensing. Sioux Falls (Minnehaha County) and Rapid City (Pennington County) are the largest cities and may have local licensing requirements. Many smaller SD cities and rural areas have minimal or no local business licensing requirements.

South Dakota Notes

Important state-specific details

NO STATE INCOME TAX: South Dakota has no individual or corporate income tax - a major business attraction; no income tax registration needed.
NO STATE CORPORATE INCOME TAX: Also no franchise tax on income.
SD SALES TAX: 4.2% state rate (reduced from 4.5% effective July 1, 2023 per SD law); municipalities may add up to 2% local; typical combined rates 6-6.2% in most areas.
SD is a popular state for business formation due to no income tax; many financial trusts and holding companies incorporate in SD.
SD LLC formation: $150 - moderate nationally.
Annual report: $50 - moderate nationally.

Official Source

State office contact

State Office

SD Secretary of State, Business Services - sdsos.gov | (605) 773-4845; SD Department of Revenue - dor.sd.gov | (605) 773-3311; SD DLR (professional licenses) - dlr.sd.gov | (605) 773-3101