South Dakota contractor license requirements

Licenses and registrations

Contractor's excise tax license (Department of Revenue)

Anyone entering into a contract for construction services, or doing construction, installation or repair of fixtures to real property. This includes repair or remodeling of existing real property.

• Good to know: This is a tax license, not a competency license. The excise tax is 2% of gross receipts. Subcontractors need a project-specific prime contractor exemption certificate from the prime, or they are treated as prime contractors and owe the tax.

Electrical contractor license (State Electrical Commission)

Businesses doing electrical work. The Commission licenses all electricians in the state.

• Good to know: Requires a journeyman license plus two more years (4,000 hours, including at least 2,000 hours of commercial work) before the contractor exam, a $10,000 undertaking (bond) and liability insurance.

Plumbing contractor license (State Plumbing Commission)

Businesses doing plumbing work.

• Good to know: Six years of experience as a contractor, plumber or apprentice, with at least two as a contractor or plumber.

What you need to qualify

• Business registration: Get a contractor's excise tax license from the South Dakota Department of Revenue before starting construction work.
• Also required: No state competency license is required for general contracting, remodeling, roofing, painting, flooring, siding or handyman work. Check city licensing rules.

Electrical, plumbing and HVAC work

The South Dakota State Electrical Commission licenses electricians and electrical contractors (contractor requirements: $10,000 undertaking, liability insurance of at least $100,000 per occurrence and $300,000 aggregate for bodily injury, and $25,000 per occurrence for property damage, or a $300,000 combined single limit; 16 hours of CE per two-year cycle). The State Plumbing Commission licenses plumbing contractors and plumbers, plus sewer and water, appliance, water conditioning, underground irrigation and manufactured home installers. No state HVAC board is listed among the Department of Labor and Regulation boards.

City and county rules

Cities may license contractors. Sioux Falls Planning & Building Services licenses Residential Building Contractors, Commercial Building Contractors, Residential Roofing & Repair Contractors, and electrical, mechanical/HVAC and plumbing contractors. Check with the city or county where you work.

What to confirm with the state

We couldn't confirm these on an official page when we checked. Ask the licensing office before you rely on them:

• Contractor's excise tax license fee (none stated on DOR pages).
• Sioux Falls residential building contractor license requirements, fees and renewal.
• Rapid City and other city contractor licensing rules.
• Any state written-contract or consumer rules specific to home improvement.

Sources

1. SD Department of Revenue: Contractor's Excise Tax
2. SD Department of Revenue: Contractor's Excise Tax Guide (January 2026)
3. SD Department of Labor and Regulation home
4. SD DLR Boards, Commissions and Councils
5. SD State Electrical Commission
6. SD State Electrical Commission: Licensing
7. SD State Electrical Commission: Undertaking & Insurance Requirement
8. SD State Plumbing Commission: Licensing
9. City of Sioux Falls: Licensing
10. City of Sioux Falls: Contractor Licensing