Starting a service business in South Dakota comes down to four things: picking a structure, registering with the state, getting licensed for your trade, and setting up a way to bill customers. Filing an LLC in SD costs $150, ongoing reporting is $50/yr, sales tax is 4.2% (increasing) + local, and personal income tax runs No income tax. Below is the full sequence, the fees you should budget for, the licenses most trades need, and the deadlines that catch new South Dakota owners off guard.
| Item | SD cost |
|---|---|
| LLC / entity filing (one-time) | $150 |
| Annual / periodic report | $50/yr |
| Federal EIN (IRS) | Free |
| Sales tax registration | Typically free |
| Trade / professional license | Varies by trade |
| Local business license | Set by city / county |
Fees change — confirm current amounts with the SD Secretary of State and the South Dakota Department of Revenue.
Choose your structure and file with the SD Secretary of State ($150). Get your free EIN from the IRS the same day.
Register for South Dakota sales tax with the South Dakota Department of Revenue, then open a business bank account under the registered name.
Apply for your trade license and local business license. This is usually the longest step: Sales tax license; Professional license.
Get general liability insurance (and workers' comp before your first hire), then set up estimates and invoicing so you can bill the day you're cleared to work.
LLC Filing Fee
$150
Annual Report
$50/yr
Sales Tax
4.2% (increasing) + local
Income Tax
No income tax
Choose business structure
File with SD Secretary of State
Get EIN
Register for sales tax
Get local permits
Open business bank account
No income tax — great for high-earning businesses
Simple regulatory environment
No — one of the few states with zero personal or corporate income tax.
Online LLC filings with the SD Secretary of State are typically processed in a few business days, and an EIN from the IRS is issued immediately online. Trade licensing and local permits usually take longest — plan on two to six weeks before you're fully cleared to work, depending on your trade.
No — you can operate as a sole proprietor in South Dakota and still invoice customers legally. An LLC ($150 to file, $50/yr) separates your personal assets from business liability, which matters most once you're on customer property, hiring help, or signing contracts.
South Dakota sales tax is 4.2% (increasing) + local. Materials and goods are commonly taxable, while labor treatment depends on the type of work, so bill parts and labor as separate lines and register with the South Dakota Department of Revenue before you start collecting.
Open a business bank account under the registered name, then invoice from a tool that applies SD tax per line item and accepts cards. Glo Invoice sends invoices by text with a one-tap pay link, and Tap to Pay lets you charge on site before you leave the job.