How to Get Small Business Licenses and Permits in South Dakota

South Dakota Business License

Starting a business is exciting, but it can also be nerve-wracking. Not only do you have to make sure you have a good product or service, not to mention find the time to do the million activities associated with starting a business, but you have to deal with the paperwork too.

The good news is, it’s not that hard to figure out the South Dakota business licenses and permits you will need to run a successful enterprise. Once you understand the basic business license requirements, as well as any permits needed, you’ll be off to the races.

The purpose of business licenses and permits

The purpose of business licenses and permits is to ensure that your enterprise complies with all laws and regulations that apply to the jurisdiction in which you’re operating. Small business licenses and permits show governing bodies that you have taken the right steps to be legally compliant.

Business licenses vs. permits

There are two main differences between South Dakota business licenses and permits.

A business license shows that you are legally allowed to transact in a specific area. It means you have met the minimum requirements for operating your business or side-hustle.

Permits show that you are authorized to perform specific activities that pertain to your business. These often have to do with zoning, for instance, or activities where you must be of a certain age to participate in them.

Business permits, for that reason, often exhibit a lot more variation than licenses.

Types of business licenses and permits you might need for your South Dakota business

If you’re going into business in South Dakota, chances are good you will need licenses and/or permits from multiple levels: federal, state, county, and/or city.

Exactly which small business licenses and permits will depend on your industry, the goods and services you sell, and where you operate. Let’s take a quick look at what kinds of documentation you might need to run your biz.

State and local business licenses and permits

First and foremost, everyone who operates a business in South Dakota needs a license. Some online sources will tell you that this is not true, but it is. The Department of Revenue website specifically states that there is no threshold of income needed in order for a license to be required.

Bottom line: If you hang up a shingle, get a license.

This is true even if you do not have a physical location. So that means that anyone operating an Etsy business, in-home business, or otherwise remote operation must still be licensed with the Department of Revenue.

This is also true if your main headquarters are in a different state, but you operate at least some activities in South Dakota. In that case, the sales that occur in South Dakota are taxable by the state.

Tax licenses

In South Dakota, this license is referred to as a “tax license.” Licenses vary according to industry and include:

You can apply for a license on this page, with or without creating an account. If you have questions, call their toll-free number at (800) 829-9188. You can also look up the requirements for specific industries and business operations on the main Department of Revenue business page.

Professional licenses

In some professions, you need a business license saying that you are able to work in that field. This is true of law, cosmetology, and doctors. Typically, a board or agency will regulate the rules here.

Zoning and building permits

In South Dakota, you may need zoning or building permits if you are doing construction work, putting specific structures on your property, hosting certain events, or hanging signs. You may also need specific permits related to health, safety, or the environment.

Specialty-specific federal business licenses and permits

Some business activities that are regulated by a federal agency will also need a federal license or permit. These small business licenses and permits will vary according to the field, so you should check to see if any of their business activities require licenses or permits on the U.S. Small Business Administration website.

While it is impossible in the time we have to discuss every permit that might be needed, you can find everything you need to know about federal licensing and permitting at the link above. In short, various sectors fall under government jurisdiction including agriculture, transportation, firearms, and energy production.

Let’s take a specific look at how obtaining South Dakota business licenses and permits works.

How to obtain business licenses and permits in South Dakota

All right, it’s time to spill the tea. Just how do you go about getting the documentation you need to prove that you’re allowed to do business in the state?

Step 1: Determine which permits and licenses your business needs

The first step is to make a list of the licenses and permits you may need for your business. Again, this will vary, but a basic list should cover:

  1. Any licenses you need at the federal level
  2. A South Dakota tax license
  3. Appropriate professional licenses
  4. Any business activity specific licenses and permits

Keep in mind that some counties and cities in South Dakota will have their own licensing and permitting requirements. These may stack on top of the state and federal requirements. Always run a web search on your area to make sure.

To figure out the overall licenses and permits you will need, check the following sites:

  1. South Dakota Business website
  2. U.S. Small Business Administration website

The U.S. Small Business Administration website has a contact phone number that you can call if you have questions and need to speak to a real person: 800-827-5722. Plan to wait on hold for a while.

If you have federally regulated industry-specific licensing and permitting questions, try to speak to the right government agency. For example, you would speak to the Nuclear Regulatory Commission about nuclear energy and the National Oceanic and Atmospheric Administration Fisheries Service about a fishing business. You can find those listed at the SBA link above.

Find South Dakota’s Business contact information here. They will be able to guide you about any state-level permits as well as how to figure out the licensing and permitting information at your county or city level.

Step 2: Submit all required documents and application fees

Here’s a quick look at exactly how to get the documents you need.

Apply for the correct state-level license

There is no fee to get a business license in the state of South Dakota. To get the right state-level license for your business:

  1. Head to South Dakota’s Business Forms page.
  2. Choose the appropriate form; in many cases, this will be the generic business license form.
  3. Complete the application.

Get a business license in your area

Your city or county may require specific business licenses or permits. For example, you may need a license in Sioux Falls. To get one:

  1. Head to their Licensing page.
  2. Find the correct license for your field.
  3. Complete and submit the application.
  4. Pay fees as necessary, which will vary.

Get specialized South Dakota business licenses and permits

In some cases, you will need a specialized business license or permits to conduct business.

This is true of professionals such as dentists, doctors, lawyers, tax professionals, and so on. This is also true of anyone who is in construction or alcohol, adult industries, and any other regulated enterprise.

Step 3: Track the status of your application and await approval

The application process for small business licenses and permits differs depending on the government body issuing it. Make note of the processing time estimated at the time of application, and follow up if you have not heard anything within that window.

Step 4: Renew licenses and permits if needed

It is a rare business license or permit that does not expire. Make sure when you receive your license or permit that you put a note in your calendar about when it will need to be renewed.

Also note that the date listed for renewal is usually the final date by which you can renew it, not the initial date. If you miss that deadline, you risk your license and permit, and thus you risk your ability to do business in the state of South Dakota. Don’t do it!

Conclusion

Hopefully, now you feel confident about getting your small business licenses and permits together. That’s just one more step closer to realizing your dream.

FAQ

If you do not obtain the correct South Dakota business licenses and permits, then you are not legally allowed to do business in the state. This comes with legal risks.

In South Dakota, sole proprietors do not need to register with the government. However, if you are making any money whatsoever with your business, then you will need to apply for a tax license.

South Dakota requires you to renew your business license every two years.