How to Register a Contracting Company in South Dakota

Two records, and the second one is not optional

The Secretary of State creates the company. The Department of Revenue issues the credential that lets the company take construction work. Neither substitutes for the other, and because South Dakota has no contractor board at all, a new business owner who checks "is there a contractor licence" gets a no and stops looking.

The Secretary of State’s published fees are flat: $150 to file domestic LLC articles of organization electronically online, $165 on paper; the same $150 or $165 for domestic corporation articles of incorporation; and $10 for a DBA fictitious business name registration. The schedule is marked "Effective July 1, 2016."

The Department of Revenue then requires a contractor’s excise tax licence of "Any person entering into a contract for construction services (as defined in Division C of the Standard Industrial Classification Manual of 1987) or engaging in services that include the construction, building, installation, or repair of a fixture to real property," and taxes gross receipts at 2% under SDCL 10-46A, or SDCL 10-46B for qualified utility projects.

Official sources: South Dakota Secretary of State: Filing Fees; South Dakota Department of Revenue: Contractor’s Excise Tax; South Dakota Department of Labor and Regulation: Boards and Commissions

Forming the company, and the annual report that has no single statewide date

The Secretary of State forms the entity and publishes flat fees for it. Domestic LLC articles of organization are $150 filed electronically online or $165 on paper, domestic corporation articles of incorporation are the same $150 or $165, and a DBA fictitious business name registration is $10. The published fee schedule is marked "Effective July 1, 2016."

The recurring filing is an annual report at $55 online or $70 on paper. Its due date is not a single statewide date the way it is in most states: the Secretary of State directs filers to use the search tool to find their business ID "and/or see when your Annual Report is due," which means the date is keyed to your own entity rather than to a calendar the whole state shares. Look yours up and diary it rather than assuming a March or April deadline you brought from another state.

Late is expensive relative to the fee. The Secretary of State states that "Delinquent Annual Reports will incur an additional $50 late fee per Annual Report," with a further $15 paper processing fee if mailed. On a $55 filing that is close to a doubling.

None of this touches the tax side. The entity filing does not give you a contractor’s excise tax licence, and the excise tax licence does not maintain your entity. They are separate records at separate agencies with separate calendars.

Official sources: South Dakota Secretary of State: Filing Fees; South Dakota Secretary of State: Annual Report filing instructions; South Dakota Secretary of State: Business Forms and Fees; South Dakota Department of Revenue: Contractor’s Excise Tax

Contractor’s excise tax: the one thing every South Dakota contractor must have

South Dakota has no general contractor licence, and new contractors often take that to mean there is nothing to register for. That is the single most expensive misreading available in this state. The Department of Revenue requires a contractor’s excise tax licence of "Any person entering into a contract for construction services (as defined in Division C of the Standard Industrial Classification Manual of 1987) or engaging in services that include the construction, building, installation, or repair of a fixture to real property."

The rate is 2% of gross receipts for construction projects, imposed under SDCL 10-46A for non-qualified utility projects and SDCL 10-46B for qualified utility projects. Two features of the base catch people. Gross receipts include any taxes you collected from the customer, so the tax is calculated on a figure that already contains tax. And on non-qualified utility projects, owner-furnished materials must be included in your reportable gross receipts, so material the homeowner bought and handed you is in your tax base even though it never appeared on your invoice.

The prime contractor carries a paperwork duty that does not exist in most states. The Department of Revenue states that "Except for projects for a qualified utility, it is the prime contractor’s responsibility to issue prime contractor’s exemption certificates to all subcontractors for each project," and requires each certificate to show the prime’s licence number, the project location and the project description. Blanket certificates are not permitted. That is one certificate per subcontractor per project, issued by you, and a subcontractor without one is exposed on receipts you have already been taxed on.

The practical sequence for a new South Dakota contractor is therefore: form the entity with the Secretary of State, get the contractor’s excise tax licence from the Department of Revenue before you take construction work, and get the trade licence from the Electrical Commission or the Plumbing Commission if your work falls inside their chapters. There is no fourth step called "the contractor licence," and looking for one is how people end up trading with no registration at all.

Official sources: South Dakota Department of Revenue: Contractor’s Excise Tax; South Dakota Department of Revenue: Businesses; South Dakota Department of Labor and Regulation: Boards and Commissions

Trade licensing sits on top of the company, not inside it

Forming a company does not create the right to do licensed trade work through it, and in South Dakota the electrical chapter says so at the contract level rather than only at the worker level. SDCL 36-16-1 requires "Any person, firm, partnership, limited liability company, or corporation engaged, or offering to engage, in business as an electrical contractor" to hold a licence from the State Electrical Commission, so the entity itself is inside the requirement.

SDCL 36-16-14 then restricts who may sign: "No contract, agreement, or understanding with another for the installation of electrical wiring or the installation of electrical parts of other apparatus shall be entered into by anyone not an electrical contractor," with a Class B electrician’s contracting authority limited to farm and residential wiring and the related equipment.

SDCL 36-16-20 handles the company-versus-individual question directly on the insurance side: the undertaking of ten thousand dollars and the public liability policy are required before a licence issues, and "In the case of a partnership or corporation, the licensed person is exempt from insurance or undertaking requirements if the employer satisfies the requirements." It also provides that no licensed electrical contractor or Class B electrician "need furnish any additional undertaking for municipal license as such contractor or electrician."

The Plumbing Commission licenses by category rather than by entity type, across plumbing contractor, plumber, sewer and water contractor and installer, appliance contractor and installer, on-site wastewater system installer, manufactured and mobile home contractor and installer, underground irrigation contractor and installer, water conditioning contractor and installer, and apprentices in each. It requires a plumbing inspection certificate for all plumbing installations.

Official sources: South Dakota Electrical Commission Wiring Bulletin, reproducing SDCL chapter 36-16 and ARSD article 20:44; South Dakota Plumbing Commission: Licensing

Once you hire, and once you subcontract

Hiring adds an employer relationship with the Department of Labor and Regulation, which administers reemployment assistance for South Dakota businesses. We publish no reemployment assistance rate, threshold or filing date in this batch, because we did not verify one on the agency’s own page; open the account and take the dates from the agency rather than from a summary.

Subcontracting adds a duty that is specific to South Dakota and falls on the prime. The Department of Revenue states that "Except for projects for a qualified utility, it is the prime contractor’s responsibility to issue prime contractor’s exemption certificates to all subcontractors for each project," with the prime’s licence number, project location and description on each one, and blanket certificates are not permitted.

That means the certificate obligation scales with projects rather than with relationships. A prime running six jobs with the same three subs owes eighteen certificates, not three. Build it into your job-opening checklist rather than into your vendor onboarding, or it will not happen.

Official sources: South Dakota Department of Labor and Regulation: Reemployment Assistance for Businesses; South Dakota Department of Revenue: Contractor’s Excise Tax

Check the official page yourself before you file or sign

One limitation applies to everything above and you should know it before you rely on a statute citation from any source about South Dakota. The Legislature’s own site, sdlegislature.gov, returns HTTP 200 with no statute text to anything but an interactive browser. We tried the statute path and five separate API paths on 2026-08-06 and every one returned a loading shell. A monitoring system that checks status codes reads that as a healthy source. It is not one, and it means summaries of South Dakota law circulating online may never have been checked against the code.

Because of that, every verbatim SDCL quotation here comes from the Department of Labor and Regulation’s own reproduction of chapter 36-16 in the Electrical Commission wiring bulletin, published on dlr.sd.gov. We publish no verbatim text of SDCL chapter 36-25 at all, because no agency reproduction of the plumbing chapter was available to us; every plumbing statement here is the Plumbing Commission’s own description, attributed as such.

Two further limits. We publish no municipal fee, bond, insurance minimum, dollar threshold or renewal cycle for any South Dakota city or county, and SDCL 36-16-35 specifically warns that local requirements can be stricter than the state’s. And we found no South Dakota provision barring an unlicensed contractor from suing to collect payment, which we record as something we did not find rather than as a conclusion, precisely because we could not search the full code.

Official sources: South Dakota Electrical Commission Wiring Bulletin, reproducing SDCL chapter 36-16 and ARSD article 20:44; South Dakota Plumbing Commission: South Dakota Laws and Rules; South Dakota Department of Labor and Regulation: Boards and Commissions