How to Get a Small Business License in South Dakota

Are you interested in starting a business in South Dakota? If so, you'll need to be aware of state and local regulatory requirements. Before opening your doors, your business must obtain the necessary licenses and permits to legally operate.

We'll discuss the most common licenses, permits, and registrations you need to start your South Dakota business.

Which Business Licenses Do You Need for Your Small Business?

When starting a business in South Dakota, you must:

• register your business entity with the South Dakota Secretary of State (SOS)
• file taxes with the South Dakota Department of Revenue (SDDOR), and
• apply for business licenses and permits with your state, county, and town.

Which types of licenses and permits your business must apply for will depend on your business structure, industry, and location. The main types of business licenses, permits, and registrations are:

• general business licenses
• professional licenses
• seller's permits (sometimes called "sales tax certificate" or a similar name)
• zoning and building permits, and
• doing business as (DBA) registrations.

(For more general guidance, see our article on the legal requirements for starting a small business.)

General Business License in South Dakota

In South Dakota, like in many other states, you don't need a statewide general license to operate your business within the state. Instead, your location or business activities determine your business's licensing requirements.

Different regulatory licenses and permits are issued by different agencies. The Governor's Office of Economic Development (GOED) has a downloadable guide on its website that lists licenses issued by many of these state agencies. These agencies include the:

• South Dakota Animal Industry Board
• Department of Agriculture and Natural Resources
• Department of Game, Fish and Parks
• Department of Health
• Department of Labor & Regulation
• Department of Public Safety
• Department of Revenue
• Department of Social Services, and
• Department of Transportation.

The comprehensive guide also specifies the cost and duration of each license.

In addition to state-issued licenses, some licenses are issued locally. You can find more details by checking the website for the city or county where you'll operate your business. (Some businesses might be exempt from local licensing requirements under state or federal law.)

Oftentimes, cities and counties require anyone who wants to operate within the city or county to obtain a license. Some cities and counties require every business to have a license while others require only businesses in particular industries to get a license.

For example, the City of Sioux Falls requires certain types of businesses to have a license to operate within city limits. The City Licensing Office handles Sioux Falls's licenses and permits. You can find a list of licenses on the Licensing Office's website, along with links to the license applications and applicable city ordinances. The Licensing Office also provides additional helpful information—such as checklists, frequently asked questions, and agency contacts—for some of these license types.

You should visit your city's website or contact local officials to determine your business's licensing requirements.

Professional and Occupational Licenses for Businesses and Individuals in South Dakota

Before you begin practicing, you need to make sure you have the licenses and certifications required for your industry. Depending on your field, you might be required to have two separate licenses: one for you and one for your business.

The South Dakota Department of Labor and Regulation (DLR) oversees the licensing of the state's many professions and occupations. You can see a list of the state occupational and professional licensing agencies (including boards, commissions, and advisory councils) on the DLR website. Each agency has a webpage that typically includes:

• a description of the agency's purpose and the agency's contact information
• links to application and renewal forms
• initial education and continuing education requirements
• details about exams and fees
• relevant laws, rules, and regulations, and
• other helpful information.

For example, suppose Veronica wants to work as a licensed cosmetologist. She'll need to apply for a license through the South Dakota Cosmetology Commission. Veronica can access the webpage for the Cosmetology Commission on the DLR website. There, she can find information on licensing, including forms, fees, exams, and other details.

Some professions, such as physicians and attorneys, aren't listed on the foregoing websites. For those professions, you should seek out the website for the regulating board or agency on your own.

Each profession or occupation has its own rules and requirements. For instance, your profession might require you to pass an initial licensing exam or complete continuing education courses. You should contact your regulatory authority directly if you're unsure about how to apply for or maintain your license.

South Dakota Sales Tax License

Most businesses that sell, lease, or rent tangible personal property or provide taxable services must collect and pay sales tax in South Dakota. In general, you must obtain a sales tax license (sometimes called a "sales tax permit") if your business either:

• has a physical presence in the state (such as a store, office, or warehouse), or
• has more than $100,000 in gross revenue from South Dakota sales.

You can apply for a sales tax license using the SDDOR's online Tax License Application. You can also apply for other tax licenses under this application, such as the alcohol, manufacturer, wholesaler, and lottery tax licenses. You should create an account before you start your application so you can easily renew your license.

You'll need a sales tax license for each of your business locations. For example, if you have a restaurant in downtown Sioux Falls and one in nearby Brandon, then you'll need two licenses.

For more information, visit the sales and use tax section of the SDDOR website. The webpage has detailed information about the state sales and use tax and includes links to guides and resources, such as the Sales Tax Guide and educational seminars.

Depending on your location, your business might also be responsible for local sales tax. You should also check with your city or county to learn about your local tax reporting requirements.

Local Zoning and Building Permits

If you're planning on doing construction work—for example, building a new space or renovating an existing space—you'll likely need to get special zoning and building permits from your city or county. The permitting process typically requires an application, meetings with local officials, and building inspections. If your construction work is more extensive, you might need to submit site plans or hire a professional architect or engineer.

Sometimes, at the end of the review process, if the city or county has signed off, you'll receive a clearance letter, certificate of occupancy, or similar document that allows you to start occupying your commercial space.

For instance, the City of Sioux Falls requires a permit for new construction, additions, remodeling, and a change-in-use. You can find details about the city's permitting process on the permits section of its website. For example, the city website has details regarding:

• garages and sheds
• fences
• signs
• special events
• fire permits, and
• other related topics.

The Sioux Falls website also has a FAQ page for building permits.

You should talk to your local officials or visit your city or county website for information related to building permits and inspections. You can sometimes find an online application for the type of permit you need. Be sure to also review your local code and ordinances to figure out which zoning and building requirements apply to your business and planned operations.

Zoning laws. If your type of business isn't in line with the zoning code, it could be a good idea to look for another space for your business. Alternatively, you might be able to apply for a special use permit. A special permit can provide your business with an exception to the current use laws.

Building code. You can work with local departments and agencies to apply for building and construction permits. You'll likely need to have inspections related to your space's structural, electrical, mechanical, and plumbing features.

If you'd like to lease a commercial space, make sure you have a section in the commercial lease that ensures that the building and your use of the space are in line with the zoning laws.

Registering a DBA in South Dakota

In South Dakota, if you conduct business using a name that's different from your legal name, you must file a fictitious name statement with the SOS. Your legal name depends on your business structure:

• The legal name for a sole proprietor or a general partnership is the last name of each owner.
• A legal name for a corporation, limited liability company (LLC), and other incorporated entities is the name registered with the SOS (usually on the company's articles of incorporation or articles of organization).

(S.D. Codified Laws § 37-11-1 (2024).)

South Dakota also calls a fictitious name, a "DBA." You can register your DBA online through the SOS website. You can also renew your DBA through the SOS website.

For example, suppose Jerry originally organized his car repair business as a South Dakota corporation with the name Jerry's Pierre Garage, Inc. He now wants to operate the business under the name "Pierre's Best Foreign Auto Repair, Inc. Jerry must go to the DBA registration application on the SOS website, complete the online application, and submit it, along with the filing fee, to the SOS.

You must renew your DBA registration every five years. (S.D. Codified Laws § 37-11-1 (2024).)

As of 2024, the fee to register your DBA is $10. The cost to renew your DBA is also $10.

For additional information, including links to relevant forms, see the assumed name/DBA webpage on the SOS website.

Other Licenses and Permits Your Business Might Need

Apart from the licenses and permits discussed above, your business might be required to comply with other laws and regulations. You might need to obtain licenses and permits from the federal, state, and local governments. For example, your business could need to apply for special licensing or follow special rules related to:

• safety
• health, and
• the environment.

Sometimes, these regulatory areas are combined with other licenses, permits, and registrations. However, at other times, these licenses and permits will require a separate process altogether. If you're in a highly regulated field, you're more likely to need additional licenses and permits. For instance, if you're running a plant that could potentially affect water streams or air quality, then you'll probably need to follow additional protocols.

The requirements vary depending on the city or county involved. You should check the websites for the city and county where you'll operate your business for more information. Some businesses might be exempt from local licensing requirements under state or federal law.

You can contact government officials or visit government websites for more information.

Additional Information for Small Businesses in South Dakota

The GOED website is a great resource for new business owners. The start your business section of the GOED website has a wealth of resources, including links to various downloadable guides:

• Business Start-Up Packet
• Licensing and Registering Your Business
• Resource Directory, and
• New Business Checklist.

Among other topics, you can information about financial assistance programs and industry-specific data.

In addition, the U.S. Small Business Administration (SBA) has a district office in Sioux Falls. The office's website lists upcoming events, resources, and news for small businesses. You can also look for one of South Dakota's Small Business Development Centers located around the state. These centers offer advice and guidance on starting and developing your business.

If you're looking for more information, check out the small business section of our website. You can also read Legal Guide for Starting & Running a Small Business, by Fred S. Steingold (Nolo), and The Small Business Start-Up Kit, by Peri Pakroo (Nolo).

For personalized, professional help, consider speaking with a South Dakota business attorney. A lawyer can help you identify the licenses and permits required for your business and walk you through the steps to complete the licensing process. It might be a good idea to work with an attorney who has experience in your industry or who works with businesses in your area.