South Dakota License Requirements — Sales/Use and Contractors' Excise Tax

Text version of this table

https://dor.sd.gov/ 1-800-829-9188	License Requirements for Sales, Use & Contractor’s Excise Tax
The purpose of this tax fact is to provide general guidelines on license requirements for sales, use, and contractor’s excise taxes and how to obtain a permit in South Dakota. It is not intended to answer all questions that may arise. The information contained in this fact sheet is current as of the date of publication.			August 2025
Who Needs a South Dakota Tax License?		South Dakota Taxes and Rates
Sales Tax License: Any retailer selling, renting, or leasing products or services (including products and services delivered electronically) in South Dakota is required to have a sales tax permit. Contractor’s Excise Tax License: Any person entering into a contract for construction services, (i.e. construction, building, installation, repair, or remodeling to real property) is required to have a contractor's excise tax license. Sales and Use Tax Licensing		State Sales Tax and Use Tax – Applies to all sales or purchases of taxable products and services.		4.2%
		Municipal Sales Tax and Use Tax – Applies to all sales of products and services that are subject to the state sales tax or use tax if the purchaser receives or uses the product or service in a municipality that imposes a sales tax or use tax.		1 to 2%
		Contractor’s Excise Tax – Imposed on the gross receipts of all prime contractors
Businesses are required to have a South Dakota sales tax license and must collect and remit sales tax on taxable transactions if: • the business has a physical presence in South Dakota.		engaged in construction services or realty improvement projects in South Dakota. The gross receipts include the tax collected from the consumer.		2%

# South Dakota Taxes and Rates

State Sales Tax and Use Tax - Applies to all sales or purchases of taxable products and services.
4.2%
Municipal Sales Tax and Use Tax - Applies to all sales of products and services that are subject to the state sales tax or use tax if the purchaser receives or uses the product or service in a municipality that imposes a sales tax or use tax.
1 to 2%
Contractor's Excise Tax - Imposed on the gross receipts of all prime contractors engaged in construction services or realty improvement projects in South Dakota. The gross receipts include the tax collected from the consumer.
2%
Example:
A local business owner regularly hires a repair person to work on replacing fixtures, installing a new bathroom, replacing broken windows, and installing a new entrance door.

The business owner does not need a contractor's excise tax license. The improvements are being done on the business owner's own property. The repair person will owe contractor's excise tax on all realty improvements that are done.

2 | August 2025 │ South Dakota Department of Revenue │ License Requirements for Sales, Use & Contractor's Excise Tax
Contact Us
If you have any questions, please contact the South Dakota Department of Revenue.
Call toll-free: 1-800-829-9188
Business Tax Division Email: bustax@state.sd.us
Website: https://dor.sd.gov/
Mailing address and office location: South Dakota Department of Revenue
445 East Capitol Ave
Pierre, SD 57501
How to Apply for a South Dakota Tax License
There is no fee for a sales or contractor's excise tax license. A license card will be issued once the license is approved.
Sign up to file and pay your taxes electronically at the same time you apply for a sales and use or contractor's excise tax license.
Apply for a tax license online at https://apps.sd.gov/rv23cedar/main/main.aspx.
Doing Business in Multiple States?
Apply through the Streamlined Sales Tax System at www.streamlinedsalestax.org to obtain a license with the programs 24-member states.
Operating Without a License
Anyone operating a taxable business in South Dakota without a tax license is guilty of a Class 1 misdemeanor. The penalty, if convicted, is up to $1000 and/or one year in jail. Any person continuing to operate a business after receiving notification from the Department that a license is required could be found guilty of a Class VI felony. If convicted, the fine is up to $4000 and/or two years in the state penitentiary. (SDCL 10-45-48.1)
Consolidated Filing - Multiple Locations
Businesses with multiple locations in South Dakota must hold a license for each business location. If a business has multiple locations, it may be eligible for a statewide tax license for consolidated filing which allows them to file one consolidated tax return, rather than a tax return for each location.

Statewide tax permits may only be issued to businesses with identical ownership, the same federal identification number, the same Standard Industrial Classification number, and the same license type.
An application for a consolidated return must be completed by the business and approved by the department.

For more information, call the department at 1.800.829.9188.
Publications

Sales Tax Guide
Contractor's Excise Tax Guide
Municipal City Tax Guide