How to Get a South Dakota Business License

A window washer with a South Dakota business license cleans a customer's window.

Did you know South Dakota is one of the most affordable places in the United States to start a small business? That’s because there’s no corporate or individual state income tax. There’s also no business inventory tax or personal property tax. Nice.

No wonder so many South Dakotans are rolling up their sleeves to start their own businesses.

If you’re one of these budding entrepreneurs, you need to get a business license before you start working. And if you’ve started to research how to get a business license in South Dakota, and you’re a bit confused, you’re not alone. After all, there’s a lot of information out there.

Fortunately, I’ve done most of the research for you. Just follow this quick guide to getting your South Dakota business license. Once you’re official in the eyes of the state (if you need to), you’ll be well on your way to business ownership.

Ready to get started? Let’s go!

Do I Need a South Dakota Business License?

Not every business in South Dakota needs a license to open. But many businesses do. The South Dakota Governor’s Office of Economic Development recommends that businesses related to the following industries get licensed before officially opening:

A business license helps protect the public by keeping your company accountable with the state. That way, the state of South Dakota can check in with you to ensure you’re following health, safety, and environmental regulations, as well as adhering to financial and tax guidelines.

Not sure if your business falls within one of the above industries? It’s best to call the South Dakota Governor’s Office of Economic Development to find out. A member of their team can help point you in the right direction.

South Dakota Governor’s Office of Economic Development 711 E. Wells Avenue Pierre, South Dakota 57501 [email protected] 800-872-6190

Fortunately, getting a business license benefits you too. Trust me, it can be worth the administrative work and the required minor fee to become official. For example, a South Dakota business license can:

  • Make your business look professional, reliable, and credible.
  • Elevate your company’s brand name.
  • Market your business to new customers in the area.
  • And much more.

South Dakota also makes it relatively easy and inexpensive to get a business license, especially compared to other states. Sold yet? Good! Next, we’ll cover how to get a business license in South Dakota.

How to Get a Business License in South Dakota

1. Find out if you need a business license by contacting the South Dakota Governor’s Office of Economic Development.

Remember, not every small business owner needs to get a license — just companies that work in specific industries, as listed above.

This means if you work in marketing, web design, or as a bookkeeper, you may not need a business license to start working with customers. Always double-check with the South Dakota Governor’s Office of Economic Development first.

2. Apply for a South Dakota business license with the right agency.

Even though the Office of Economic Development can point you in the right direction, they won’t actually prepare a license for you. Instead, you need to go to one of the following agencies to complete your application:

Every agency operates a little differently. Plus, every South Dakota business license has unique requirements. You can find out more about the various licenses that are available by downloading this information sheet.

3. Gather paperwork and background information.

Feeling overwhelmed? Don’t be. A little bit of organization can go a long way. When you’re ready to apply for a license with the right South Dakota agency, make sure you gather specific background information. Having the details prepared ahead of time can make the application process go faster. For example, you may want to have the following information on hand:

  • Your federal Tax ID or EIN
  • A personal address and phone number
  • A business address and phone number
  • Your driver’s license number
  • A seller’s permit number (if you sell goods)
  • A business plan with your anticipated revenue and expenses
  • A Certificate of Insurance (COI) proving you carry a business insurance policy, if required

4. Reach out to your local municipal department.

Many local cities and counties have their own requirements too. Make sure you dot all your I’s and cross your T’s by contacting your local municipal department to ask about additional business licenses and permits, as well as zoning requirements you may need to follow.

You can start with the city, county, or town clerk where your workplace is located. I recommend taking a trip to the office in person, if it’s close by. That way, you can ask the right questions and fill out the paperwork right away.

South Dakota Business License + Insurance Info

Do you have a Certificate of Insurance (COI)? If not, now may be the time to get one. This important document proves that you carry business insurance, such as general liability insurance and professional liability insurance.

In some instances you’ll need to present a COI to the state before you can get a business license. The state wants to be sure you have protection in the event of an accident, injury, or loss to property at your workplace. Business insurance also can help cover you financially if you face a lawsuit and need to hire a lawyer.

Unfortunately, this happens more often than you’d think. It’s fairly common for small business owners to be accused of negligence, copyright infringement, or other costly claims. You don’t want to be left without financial protection.

Without business insurance, some of these claims are enough to set you back personally and professionally.

If you’re ready to buy a business insurance policy, check out Simply Business’s free quote comparison tool. It lets you compare affordable business insurance policies in South Dakota. And, best of all, it takes just 10 minutes or less.

Applying for a SD Business License?

You may need to show proof of business insurance to get your license.

That’s where we come in. Compare free insurance quotes for policies as low as $19.58/month.*

How Much Does a South Dakota Business License Cost?

If you’re investigating how to get a business license in South Dakota, you’re probably also wondering how much it costs. Here’s the answer — it depends on the type of business license you need. Some licenses cost more than others, depending on your industry.

As I mentioned earlier, it’s fairly low cost to start a small business in South Dakota. In fact, it’s one of the easiest states to get started in as an entrepreneur. Most business licenses are relatively affordable, and ideally, you’ll be able to recoup the costs as soon as you get up and running.

It’s a good idea to follow the state’s regulations and get a business license if you need one. You don’t want to face hefty penalties later on. Or worse, you could risk getting your business shut down. So it’s worth it to complete the paperwork and take steps to set up your business correctly from the get-go.

When you’re done, you’ll be considered “official” in South Dakota. Now that’s a status to be proud of! It’s the first of many milestones you’ll celebrate as a small business owner.

So what are you waiting for? Find out if you need a small business license today.

Emily Thompson

I earned a B.A. in Journalism from the University of Wisconsin at Madison (go Bucky). After realizing my first job might involve carrying a police scanner at 2 am in pursuit of “newsworthy” crimes, I decided I was better suited for freelance blogging and marketing writing. Since 2010, I’ve owned my freelance writing business, EST Creative. When I’m not penning, doodling ideas, or chatting with clients, you’ll find me hiking with my husband, baby boy, and 2 mischievous mutts.

Emily writes on a number of topics such as entrepreneurship, small business networking, and budgeting.