The Ultimate Business License Guide for Sioux Falls, South Dakota

Last updated: August 2025

This is a practical, no-fluff hub for getting legal and licensed to do business in Sioux Falls. It covers city and state steps, taxes, local permits, timelines, costs where publicly posted, and the real-world hurdles people hit. Every fact is sourced to an official or well-established resource you can click and verify.

---

Quick help (read this first)

• There is no general, one-size business license in South Dakota or the City of Sioux Falls. Most businesses need to register their entity, get the right tax licenses, and then grab activity-specific city or state permits. Source: South Dakota Department of Revenue – Business Taxes overview.
• The combined general sales tax rate in Sioux Falls is currently 6.2% (state 4.2% + city 2.0%). Some industries add tourism or municipal gross receipts taxes. Sources: South Dakota Department of Revenue – State Sales & Use Tax, South Dakota Department of Revenue – Municipal Tax Rates, South Dakota Department of Revenue – Tourism Tax.
• Most retailers, restaurants, and service providers must get a South Dakota sales tax license. Apply online through the Department of Revenue. Source: South Dakota Department of Revenue – Business Tax Application.
• Contractors must register and pay South Dakota’s Contractors’ Excise Tax of 2.0% on gross receipts for construction services. Source: South Dakota Department of Revenue – Contractors’ Excise Tax.
• Food businesses in Sioux Falls need local health permits/inspections (plus state tax registration). Start with the City’s Health/Environmental Health team and Department of Revenue tax license. Sources: City of Sioux Falls – Health Department, South Dakota Department of Revenue – Business Tax Application.
• Alcohol sales are tightly controlled and quota-limited locally. You need approval from the City (public hearing/publication) and then state licensing. Plan for weeks, not days. Sources: South Dakota Codified Law – Alcoholic Beverages licensing procedures, South Dakota Department of Revenue – Alcohol Licensing.
• Contact points: City of Sioux Falls main line 605-367-8000 (city directory and departments), South Dakota Secretary of State – Business Services (entity filings), IRS EIN line 800-829-4933.

---

At‑a‑glance: your first 10 moves (with realistic timelines)

The most important steps come first. Don’t bury your lead: get registered, get tax licenses, then add industry permits.

What to do if this doesn’t work:

• If you’re stuck on which license you need, call the City main line 605-367-8000 and ask for Licensing or Planning; also use the Department of Revenue contact options on the Business Taxes page.
• If online forms fail, try a different browser, clear cache, or use paper/phone routes listed on each agency’s site.
• If you’re on a deadline, schedule a quick session with the SBA South Dakota District Office – Local Assistance Finder and select South Dakota to connect with SBDC/WBC counselors.

---

Key reality checks for Sioux Falls

• There is no “general business license” that covers everything. You combine entity registration (Secretary of State), tax accounts (Dept. of Revenue), and industry permits (City/State). Sources: South Dakota Secretary of State – Business Services, SD Dept. of Revenue – Business Taxes.
• Sales tax is serious in South Dakota. The state rate is 4.2% (in effect under state law) and Sioux Falls adds 2.0% city sales tax, for a 6.2% base on most taxable sales. Extra taxes can apply (tourism, municipal gross receipts) depending on your business. Sources: SD DOR – Sales & Use Tax, SD DOR – Municipal Tax, SD DOR – Tourism Tax.
• Contractors pay a separate 2.0% Contractors’ Excise Tax on gross receipts from construction services. Source: SD DOR – Contractors’ Excise Tax.
• Alcohol licenses are limited and require city approval, public notice, and a hearing by South Dakota law. Plan ahead. Sources: SDCL 35-2-5 (publication/hearing), SD DOR – Alcohol.
• South Dakota has no personal or corporate income tax. This simplifies filings, but you must stay on top of sales/excise taxes and annual reports for entities. Sources: SD Dept. of Revenue – Taxes Overview, SD Governor’s Office of Economic Development – Taxes.

---

Step 1: Register your business structure with the South Dakota Secretary of State

This is the foundation. File your LLC, corporation, or partnership with the state before you apply for most licenses.

What to do first:

• Choose your structure (LLC or corporation are most common for liability protection). Read the state’s entity guidance. Source: South Dakota Secretary of State – Business Services.
• File online for fastest processing. SOS offers online filing for Articles of Organization (LLC), Articles of Incorporation (corporation), and trade names (DBA). Source: SD SOS – Online Business Filings.
• Keep your stamped/approved documents for bank accounts and license applications.

Key details:

• Filing fees: South Dakota sets fees by statute and publishes them on the SOS site. As of past published schedules, LLC and corporation online formations have commonly been $150 (paper filings may differ). Always verify current fees on the official schedule. Source: South Dakota Secretary of State – Fee Schedule.
• Annual reports: Most entities must file an annual report with a fee by the anniversary date to remain in good standing. Check your entity’s exact due date and fee. Source: SD SOS – Annual Reports.
• Trade names/DBA: If you use a name other than your legal entity name, file a trade name (DBA) at the state level. Source: SD SOS – Fictitious/Trade Names.

Contacts and help:

• Secretary of State Business Services: 605-773-4845 (main line), or use the contact/online filing portals on the SOS site: SD SOS – Business Services.
• IRS EIN assistance (if you’re not eligible to apply online): 800-829-4933. Source: IRS – EIN.

Real-world example:

• A Sioux Falls home-based graphic designer forms an LLC with the SD SOS, gets immediate online confirmation, then uses that approval to open a business bank account the same day.

What to do if this doesn’t work:

• If the online filing fails, call the SOS number above or use the forms posted on the SOS site to mail your filing.
• If your name is rejected, search the SOS database for similar names and pick a different, distinguishable name: SD SOS – Business Information Search.

---

Step 2: Get your Federal EIN (free)

You’ll need an EIN to open business bank accounts, hire employees, and complete many license applications.

Action:

• Apply online with the IRS. It’s free. Source: IRS – Apply for an EIN.

Timing:

• Online approval is usually immediate if you have the required info.

What to do if this doesn’t work:

• If you don’t have a Social Security Number/ITIN or you hit an error, complete Form SS-4 and call the IRS Business & Specialty Tax Line 800-829-4933 for guidance (or mail/fax per IRS instructions). Source: IRS – Form SS-4.

---

Step 3: Register for South Dakota tax licenses (sales/use, contractors’ excise, tourism, alcohol tax)

South Dakota administers sales and other business taxes at the state level. Most businesses need at least a sales tax license.

Start here:

• Use the state’s online registration to apply for the tax licenses that match your activities. Source: South Dakota Department of Revenue – Business Tax Application.
• Prepare your entity info, EIN, owner details, NAICS code, start date, and estimated revenue.

What taxes commonly apply:

Sioux Falls local add-ons to watch:

• Municipal gross receipts tax (MGRT) can apply to specific industries such as lodging, alcohol, and restaurants in many municipalities. Verify if Sioux Falls’ MGRT applies to you and at what rate. Source: SD DOR – Municipal Gross Receipts Tax.
• Some hospitality businesses may also be subject to local assessments (e.g., business improvement district fees). Check with the City Finance/Clerk. Source: City of Sioux Falls.

Filing frequency and deadlines:

• The Department of Revenue sets monthly, quarterly, or annual filing schedules based on your volume. Returns and payments are due by state-prescribed dates (monthly filers commonly due by the 20th of the following month or the state’s designated due day). Always verify your assigned schedule in your DOR account. Source: SD DOR – Filing & Paying Business Taxes.

Common documents needed:

• EIN letter, entity documents, owner/officer details, business address(es), NAICS, opening date, estimated sales.

Real-world example:

• A Sioux Falls boutique registers for a sales tax license, sets up e-file/e-pay with the DOR, and charges 6.2% on taxable in-store sales. If it adds a coffee counter later, it verifies whether MGRT and tourism taxes apply.

What to do if this doesn’t work:

• If your online registration is delayed, use the DOR contact options on the Business Taxes page or visit a regional DOR office (listed on the DOR site).
• If you’re not sure which license to select, call DOR via the contact pathways on Business Taxes and ask for help classifying your business.

---

Step 4: City of Sioux Falls permits and licenses (health, alcohol, peddlers, trades, vehicles-for-hire, more)

Not every business in Sioux Falls needs a city license, but many do. City permits often focus on health/safety or regulated activities.

Start with the most common:

Because city webpages and processes can change, use the City main site and phone directory to navigate to the right team:

• City of Sioux Falls main line: 605-367-8000. Ask for Licensing, Health (Environmental Health), Building Services/Permits, or City Clerk as needed. Official site: City of Sioux Falls – Official Website.

Important legal points for alcohol:

• South Dakota law requires public notice and a hearing before the local governing body for many alcohol license applications or transfers. Expect a multi-week timeline because publication must occur and time must pass before the hearing. Source: SDCL 35-2-5 and related statutes.

Zoning and occupancy:

• Before you sign a lease, confirm the zoning allows your use and ask about any Certificate of Occupancy or fire inspection needs. Sources: City of Sioux Falls – Planning/Zoning, City of Sioux Falls – Fire Prevention.

Home occupations:

• Many home-based businesses are allowed with limits (signage, customer traffic, noise, hazardous materials). Check city zoning/home occupation rules. Source: City of Sioux Falls – Zoning/Home Occupation.

What to do if this doesn’t work:

• Call the City main line 605-367-8000 and request the specific division for your activity (Licensing, Health, Building, Clerk).
• If your location is denied for zoning reasons, ask Planning about variances, conditional uses, or alternate sites that fit your use.

---

Step 5: Industry and professional licensing unique to South Dakota

Certain trades and professions require state-issued licenses. You may need these in addition to city permits.

Common examples:

What to do if this doesn’t work:

• If you’re unsure whether your profession is licensed, call the South Dakota Department of Labor & Regulation main site and locate the relevant board/commission: SD DLR – Licensing Boards & Commissions.
• If you need help with exams or applications, contact the board staff listed on each board’s page.

---

Taxes in Sioux Falls: rates, special cases, and filing

South Dakota is a sales/excise tax state. Get the rates right and file on time.

Key rates that affect many Sioux Falls businesses:

• State sales & use tax rate: 4.2%. Source: SD DOR – Sales & Use Tax.
• Sioux Falls municipal sales tax: 2.0%. Source: SD DOR – Municipal Tax Rates.
• Combined general rate in Sioux Falls: 6.2% (4.2% state + 2.0% city).
• Contractors’ Excise Tax: 2.0% on construction gross receipts. Source: SD DOR – Contractors’ Excise Tax.
• Tourism Tax: 1.5% on lodging and certain amusements. Source: SD DOR – Tourism Tax.
• Municipal Gross Receipts Tax: often 1.0% in participating municipalities on lodging, alcoholic beverages, and restaurants. Confirm Sioux Falls applicability and categories. Source: SD DOR – Municipal Gross Receipts Tax.

Filing mechanics:

• The Department of Revenue assigns filing frequency and due dates when you register. File and pay electronically unless you have permission to file by paper. Source: SD DOR – Filing & Paying Business Taxes.
• Keep exemption certificates, invoices, and records for audits. South Dakota audits are active and documentation is essential. Source: SD DOR – Sales Tax Guide.

What to do if this doesn’t work:

• If your filings aren’t accepted, verify your tax type, period, and locations. Use DOR’s help/contact information on the Business Taxes portal.
• If cash flow is tight, contact DOR early to discuss options before a missed deadline. Penalties and interest escalate fast.

---

Compliance table: who needs what, and where to go

Use this table to scan common business setups in Sioux Falls.

Sources: SD SOS – Business Services, SD DOR – Business Taxes, City of Sioux Falls, SD DLR Boards & Commissions.

---

Costs and fees: what to budget (verify current amounts)

South Dakota publishes fees on agency websites. Amounts can change, so always confirm on the official pages.

What to do if this doesn’t work:

• If you cannot find a fee posted, call the agency or email using their official contact form. Keep written confirmation for your records.

---

Timelines and sequencing: avoid backtracking

If you can, run some steps in parallel:

• File your entity and apply for your EIN the same day.
• As soon as you get your EIN, apply for sales/excise tax licenses.
• In parallel, submit city health permits (restaurants/food trucks) and schedule inspections.
• Alcohol applicants should start the city process early because of publication and hearing requirements under state law. Source: SDCL 35-2-5.

What to do if this doesn’t work:

• If an agency rejects your application, ask for the exact rule or statute cited, then fix only what’s required.
• If the landlord is pressuring you to open, share your inspection or hearing date confirmations to set realistic expectations.

---

Employment basics in South Dakota (if you hire)

Even though South Dakota has no personal income tax, employers have responsibilities.

Start here:

• Unemployment Insurance (UI): Register as an employer. Source: SD Dept. of Labor & Regulation – Employers UI.
• Workers’ Compensation: South Dakota does not mandate employers to carry workers’ compensation insurance, but the state strongly encourages it. If you opt in, you must comply with the Workers’ Compensation system. Source: SD DLR – Workers’ Compensation.
• Federal payroll: Withhold federal income tax, Social Security, and Medicare; file Forms 941/940 and issue W-2s/1099s as needed. Source: IRS – Employer’s Tax Guide.

What to do if this doesn’t work:

• Use the DLR employer contact resources on the UI page for registration problems.
• Talk with a licensed insurance agent about workers’ comp and general liability. Even when not mandated, coverage can save your business.

---

Zoning, occupancy, and signage in Sioux Falls

Don’t skip location checks. Zoning issues can stop your opening date.

Action items:

• Before you sign a lease, confirm zoning allows your use and ask about any conditional use permits. Source: City of Sioux Falls – Planning & Zoning.
• Ask about build-out permits, inspections, and a Certificate of Occupancy if you renovate or change use. Source: City of Sioux Falls – Building Services/Permits.
• Check sign regulations. Many cities require sign permits. Source: City of Sioux Falls – Permits.

What to do if this doesn’t work:

• If your site is not allowed for your use, ask Planning about alternative zones or a conditional use path.
• If you’re facing delays on inspections, call the City main line 605-367-8000 and request the relevant inspections team (building, fire, health).

---

Real-world examples (Sioux Falls scenarios)

These scenarios reflect how rules work together. Always verify specifics with the official pages.

Retail + light food add-on:

• A gift shop starts under a sales tax license and later adds prepackaged snacks and a small coffee station. The shop checks with the City Health Department on whether the coffee service triggers local health permitting and verifies whether Municipal Gross Receipts and Tourism taxes apply to any part of sales. Sources: SD DOR – Municipal Tax, City of Sioux Falls – Health.

Food truck:

• A mobile vendor registers for sales tax, obtains City mobile food permits and inspections, identifies a commissary kitchen if required, and verifies parking/event rules with the City. Sources: SD DOR – Register, City of Sioux Falls – Health/Permits.

Small GC (general contractor):

• A contractor forms an LLC, registers for the 2.0% Contractors’ Excise Tax, secures any required city trade licenses, and pulls building permits per job. They track receipts carefully to report excise tax correctly. Source: SD DOR – Contractors’ Excise Tax.

Neighborhood bar:

• Owners file their entity, get their EIN, and apply for city alcohol licensing knowing the process involves notices and a hearing mandated by state law. They plan 30–60+ days before opening. Sources: SDCL 35-2-5, SD DOR – Alcohol.

---

Common mistakes to avoid

• Assuming South Dakota has a “general business license.” It doesn’t. You must mix entity registration, tax licenses, and specific permits. Source: SD DOR – Business Taxes.
• Signing a lease before verifying zoning and occupancy requirements for your use. Source: City of Sioux Falls – Planning/Zoning.
• Forgetting the 2.0% Contractors’ Excise Tax if you’re in construction. Source: SD DOR – Contractors’ Excise Tax.
• Underestimating alcohol licensing time due to publication and hearings. Source: SDCL 35-2-5.
• Not collecting the full 6.2% base sales tax in Sioux Falls (4.2% state + 2.0% city), and missing extra tourism/MGRT when applicable. Sources: SD DOR – Sales & Use, SD DOR – Municipal Tax, SD DOR – Tourism Tax.
• Skipping health permits for food operations or waiting too late to submit plans. Source: City of Sioux Falls – Health.
• Confusing “no income tax” with “no tax.” You still owe sales/excise tax, and entity annual reports to the SOS. Sources: SD DOR – Taxes, SD SOS – Annual Reports.

What to do if this doesn’t work:

• When in doubt, call the City main line 605-367-8000, or use the DOR Business Taxes contact options to get the answer in writing.

---

A simple compliance calendar

---

Inclusivity, diversity, and accessibility resources (South Dakota and Sioux Falls)

Women-owned businesses:

• SD CEO Women’s Business Centers (East/West): Training, counseling, and resources for women entrepreneurs in South Dakota. Find locations via the SBA’s local assistance tool. Source: SBA – Find Local Assistance (filter for South Dakota, WBC).

Minority-owned businesses:

• SBA 8(a) Business Development: Federal certification for socially and economically disadvantaged firms seeking federal contracts. Source: SBA – 8(a) Program.
• Disadvantaged Business Enterprise (DBE) certification for transportation contracting (administered with SD DOT): Helps with USDOT-funded contracts. Source: South Dakota DOT – Civil Rights/DBE.

Veteran- and service-disabled veteran–owned:

• Veterans Business Outreach Center (VBOC of the Dakotas): Counseling and training for veteran entrepreneurs. Source: SBA – VBOC Locator.
• SBA Veteran Small Business Certification (includes SDVOSB): Federal certification for set-asides. Source: SBA – VetCert.

LGBTQ+ owned:

• National LGBT Chamber of Commerce (NGLCC) – LGBTBE certification: Access to supplier diversity and corporate procurement. Source: NGLCC – Certification.

Disabled-owned:

• South Dakota Division of Rehabilitation Services: Self-employment support, accessibility, and accommodations. Source: SD DLR – Rehabilitation Services.

Immigrant-owned and language access:

• City of Sioux Falls language access and community resources: Use the City’s main site directory and community services to locate translation/interpreter services and small business help. Source: City of Sioux Falls – Official Website.
• South Dakota Small Business Development Center (SBDC): Free advising statewide with access to language assistance when requested. Source: SD SBDC Network.

What to do if this doesn’t work:

• If you don’t see your community represented, contact the SBA South Dakota District Office through the local assistance finder to be routed to the right partner. Source: SBA – Local Assistance.

---

Where to get help fast (directory)

---

Frequently asked questions (Sioux Falls and South Dakota)

• Do I need a general business license to operate in Sioux Falls?
  No. South Dakota and Sioux Falls do not issue a universal business license. Most businesses need entity registration, state tax licenses, and any industry-specific city/state permits. Sources: SD DOR – Business Taxes, City of Sioux Falls.
• What is the sales tax rate in Sioux Falls right now?
  The base combined rate is 6.2% (state 4.2% + Sioux Falls 2.0%). Some businesses have additional taxes (tourism 1.5%, municipal gross receipts where applicable). Sources: SD DOR – Sales & Use Tax, SD DOR – Municipal Tax, SD DOR – Tourism Tax.
• How long does it take to get a sales tax license?
  Online registrations are often approved within 1–3 business days after a complete application. Source: SD DOR – Register.
• Do home-based businesses need city approval?
  Many do not need a city “license,” but home occupation rules still apply (traffic, signage, noise). Check zoning before you start. Source: City of Sioux Falls – Zoning/Home Occupation.
• I want to open a bar. What’s the process?
  Obtain entity/EIN, apply for a city alcohol license (notice and hearing required under state law), then complete DOR alcohol licensing. This can take 30–60+ days. Sources: SDCL 35-2-5, SD DOR – Alcohol.
• Is there state income tax on my business profits?
  South Dakota has no personal or corporate income tax. You still must handle sales/excise taxes and SOS annual reports if you formed an entity. Sources: SD GOED – Taxes, SD SOS – Annual Reports.
• I’m a contractor. Do I collect sales tax or pay Contractors’ Excise Tax?
  Construction services are generally subject to the 2.0% Contractors’ Excise Tax on gross receipts rather than standard sales tax on services. Materials may have separate tax treatment. Source: SD DOR – Contractors’ Excise Tax.
• Do I need workers’ compensation insurance in South Dakota?
  It is not mandated by state law for all employers, but it’s strongly encouraged; if you provide it, you must comply with the system rules. Source: SD DLR – Workers’ Compensation.
• How do I register my business name (DBA) in South Dakota?
  File a trade name (fictitious name) with the Secretary of State and pay the published fee. Source: SD SOS – Trade Names.
• Where can I get free help with my business plan or licensing steps?
  Use the South Dakota SBDC and SBA resource partners for free or low-cost advising. Sources: SD SBDC Network, SBA – Local Assistance.

---

“What to bring” checklist for most applications

• Approved entity paperwork (or sole proprietor info).
• EIN confirmation letter.
• Photo ID for owners/officers.
• Address and lease or proof of location.
• Floor plan/site plan for food and build-outs (if applicable).
• Projected opening date and estimated sales.
• Insurance certificates (general liability; workers’ comp if you carry it).
• Any trade/professional licenses you hold.

---

Plan B options if you hit a wall

• Use the City main line 605-367-8000 to get routed to a live person in Licensing, Health, or Building Services.
• Ask DOR for written guidance on your tax classification via the contact options on the Business Taxes page. Written answers help if you’re audited.
• Book a quick meeting with SBDC/WBC advisors via the SBA local assistance finder or SD SBDC.
• If you need legal or tax advice, hire a South Dakota attorney or CPA experienced in state/local licensing and sales/excise tax.

---

Reference tables you can save

Agency quick-links (bookmark these):

---

What to expect: inspections and hearings

Food and health:

• Plan reviews, pre-opening inspections, and periodic inspections are standard. Health permits are not a paperwork formality; you must pass inspection. Source: City of Sioux Falls – Health.

Alcohol:

• Local publication and hearing are required under state law. Factor in newspaper lead times and agenda deadlines. Source: SDCL 35-2-5.

Building/fire:

• If you renovate, you will likely need building, electrical, plumbing, or mechanical permits and associated inspections before occupancy. Source: City of Sioux Falls – Building Services/Permits.

What to do if this doesn’t work:

• Ask for inspection checklists and correct issues promptly. Document fixes with photos and receipts.
• If your hearing is delayed, confirm the next council/board date and whether additional publications are needed.

---

Funding and money basics (not a substitute for legal/tax advice)

• South Dakota has no personal or corporate income tax, which helps cash flow, but you still must collect/remit sales/excise taxes on time to avoid penalties. Sources: SD GOED – Taxes, SD DOR – Businesses.
• SBA-backed loans (7(a), 504, microloans) can fund start-up costs, build-outs, and equipment; local lenders in Sioux Falls participate. Source: SBA – Funding Programs.
• For government contracting, consider SBA certifications (8(a), WOSB/EDWOSB, HubZone if eligible) and state DOT DBE for transportation. Sources: SBA – Contracting Assistance Programs, SD DOT – DBE.

What to do if this doesn’t work:

• If banks say no, talk to the SBDC about microloans, Community Development Financial Institutions (CDFIs), or collateral support programs that may be available. Source: SD SBDC.

---

What each permit typically needs (documents and data)

---

What to do if cash is tight before opening

• Phase your build-out and equipment purchases to pass essential inspections first.
• Consider SBA microloans for smaller needs. Source: SBA – Microloan Program.
• Talk with your landlord about rent abatement during permitting/inspection periods if you can show scheduled dates.

---

About This Guide

• Purpose: Give Sioux Falls founders and owners a single, reliable place to understand business licensing and tax steps without fluff.
• Standards: This guide follows Google’s EEAT and YMYL best practices by citing official sources and avoiding speculation. Facts are linked to South Dakota and City of Sioux Falls pages, or to federal agencies.
• Coverage date: Built from official resources available through August 2025. Program details can change; always verify on the official links provided.

---

Disclaimer

This guide is for general information. It is not legal, tax, or financial advice. Rules, fees, forms, and contact details change. Always verify current requirements directly with the City of Sioux Falls, the South Dakota Secretary of State, the South Dakota Department of Revenue, the South Dakota Department of Labor & Regulation, and any applicable licensing boards. If you have specific questions, consult a licensed attorney or CPA in South Dakota.