Licensing Guides
State Contractor License: How to Become a General Contractor in South Dakota
Contractor, SD
Table of Contents
Why Do You Need a Contractor License in South Dakota?
How Can You Get a Contractor License in South Dakota?
Types of General Contractor Licenses in South Dakota
What Are the Requirements of a South Dakota Contractor License?
How Long Does It Take to Get a Contractor License in South Dakota?
How Much Does It Cost to Get a Contractor License in South Dakota?
South Dakota Contractor License Training Programs and Schools
Does South Dakota Reciprocate Contractor Licenses?
Do I Need to Renew my Contractor License in South Dakota?
Are There Any Penalties for Contracting Without a License in South Dakota?
We all need a place to live and work, and those buildings require upkeep and repair. They’re often the biggest investments we make in our lives, and keeping them in good condition is essential. We count on professionals to know how to fix damage to or wear and tear on our homes and businesses. General contractors are typically the experts we rely on to help us with these repairs, and we need these men and women to know what they’re doing.
Many states require contractors to be licensed. Others simply require solid insurance to back up the essential work they perform. There are 520,900 construction managers and 1,599,800 construction laborers and helpers nationwide, according to the Bureau of Labor Statistics (BLS). South Dakota employs 690 managers and 1,840 laborers and helpers. The national number for managers is projected to grow 9% from 2023 to 2033 and 8% for laborers and helpers. In South Dakota, according to CareerOneStop, the U.S. Department of Labor’s job search website, the projected growth rate for laborers is higher than the national average at 11%, and for managers it’s also higher at 13%. If you’re thinking about becoming a contractor or you want a job in the field, you need to know the requirements in your state or local jurisdiction. This guide will help you determine what you need before you get started.
Why Do You Need a Contractor License in South Dakota?
In South Dakota, general contractors obtain trade licenses at the local level, not the state level. Since general contractors must be licensed by the cities or counties where they perform work, contractor license requirements vary in each location.
In Sioux Falls, contractors performing construction work on residential one- and two-family dwellings and townhomes within the city limits must hold a Residential Building Contractor License. Contractors constructing commercial buildings, which include apartment buildings, do not need a contractor license, but projects must go through a plan review process and acquire proper permits. The city also has several other licenses for construction industry trades.
Contractors working in Rapid City must hold a Class A Commercial and Residential Contractor License or a Class B Residential Contractor License. The city also licenses other professional trades.
In addition, the state of South Dakota requires all contractors, whether building, remodeling, or repairing property, to hold a contractor’s excise tax license from the South Dakota Department of Revenue in Pierre. The state imposes a 2% excise tax on the gross receipts for construction projects. For more information, read the DOR contractor’s excise tax guide.
How Can You Get a Contractor License in South Dakota?
To get a contractor license in South Dakota, you’ll follow the local licensing requirements of the city or county where you plan to work. We’ll cover how to get a contractor license in some of the largest South Dakota municipalities.
To work as a residential contractor in Sioux Falls, you’ll follow the requirements of the City of Sioux Falls Planning and Development Services. This includes obtaining a state contractor’s excise tax license, passing a construction supervisor examination, and meeting bond and insurance requirements.
If you’re working as a general contractor in Rapid City, you’ll follow the requirements of the Rapid City Building Services Division. This includes obtaining a state contractor’s excise tax license, obtaining general liability insurance, and passing a building exam.
Types of General Contractor Licenses in South Dakota
Since South Dakota does not issue general contractor licenses, contractor license types vary in each locality.
The City of Sioux Falls contractor classifications include:
Residential building contractor: For contractors performing work on residential one- and two-family dwellings and townhomes within the city limits. Contractors must hold a Residential Building Contractor License if they perform construction services that require a building permit, such as new construction, building sheds and decks, shingles, sheetrock replacement, exterior door or window replacement, or basement finishing.
Residential roofing and repair contractor
Class B electrician
Electrical apprentice
Electrical journeyman
Electrical contractor
Fireplace contractor
Irrigation contractor
Master plumber contractor
Mechanical contractor
Mobile home plumbing installation contractor
Plumber apprentice
Plumber journeyman
Refrigeration contractor
Right-of-way contractor
Sign and outdoor advertising contractor
Sign wiring contractor
Sioux Falls does not require commercial building contractors to be licensed, but requires commercial projects to go through a plan review process and acquire proper permits. The city considers apartment buildings commercial projects.
Rapid City contractor license classifications include:
Commercial and residential contractor (A): For construction of all types of structures.
Residential contractor (B): For the construction of detached single-family houses, attached single-family houses, and two-family dwellings.
Roofing contractor
Siding
Mechanical
Gas
Plumbing
Electrical
Sign
Getting a general contractor license
The bottom line is that many cities and counties in South Dakota require licenses to perform new commercial or residential construction, additions, remodeling, repair, or improvements. Here’s how to get a contractor license in Sioux Falls and Rapid City.
Sioux Falls
To get your Residential Building Contractor License in Sioux Falls, follow these steps:
OBTAIN CONTRACTOR’S EXCISE TAX LICENSE: Anyone entering into a contract for construction services must obtain a state contractor’s excise tax license from the South Dakota Department of Revenue. A license is needed for construction, building, installation, or repair of a fixture to real property. The state imposes a 2% excise tax on the gross receipt for construction projects.
PASS EXAM: Take and pass the construction supervisor examination. This is a timed, open-book test based on the City of Sioux Falls Residential Code Handbook. Applicants fill out an exam application and pay a $75 exam fee. The fee may be paid by check or money order payable to the City of Sioux Falls. The exam is offered once a month. You must apply for your license within 90 days after passing the examination.
OBTAIN BOND: Submit a signed, original $20,000 compliance bond, in a form approved by the city listing the contractor as principal and the City of Sioux Falls as obligee for the benefit of the city and consumers dealing with the contractor. The bond must state you are licensed as a residential building contractor. The bond requires the faithful and lawful completion of the contractor’s work and compliance with all ordinance provisions.
SHOW PROOF OF INSURANCE: Show a certificate of general liability insurance with a minimum of $300,000 in coverage. The insured business name appearing on the insurance must match the name appearing on your license application and bond.
The certificate must read:
City of Sioux Falls, Planning and Development Services
231 North Dakota Avenue
P.O. Box 7402
Sioux Falls, SD 57117-7402
OBTAIN HOME OCCUPATION PERMIT: Residential building contractors working out of their homes must obtain a home occupation permit from the city’s zoning office in the City Center.
APPLY FOR LICENSE: Print out the contractor license application PDF. Return the completed application by mail or in person to:
City of Sioux Falls, Planning and Development Services
231 North Dakota Avenue
P.O. Box 7402
Sioux Falls, SD 57117-7402
PAY LICENSE FEE: Pay the $300 license fee by check or money order, payable to the City of Sioux Falls. Fees are prorated if you apply in the second or third year of the license. For more information on license fees and about the application process, see the city’s residential building contractor information sheet.
Rapid City
To get your Class A Commercial and Residential Contractor License in Rapid City, follow these steps:
OBTAIN CONTRACTOR’S EXCISE TAX LICENSE: Anyone entering into a contract for construction services must obtain a state contractor’s tax license from the South Dakota Department of Revenue. A license is needed for construction, building, installation, or repair of a fixture to real property. The state imposes a 2% excise tax on the gross receipt for construction projects.
OBTAIN GENERAL LIABILITY INSURANCE: Present a certificate of liability insurance with a minimum general aggregate liability of $1 million, with $300,000 fire damage and $1 million each occurrence. The City of Rapid City should be listed as the certificate holder. The insurance carrier must contact the Department of Building Inspection if coverage is discontinued.
MEET INSURANCE REQUIREMENTS: Meet state workers’ compensation insurance coverage requirements or sign a worker’s compensation statement of non-participation.
PASS EXAM: Class A contractors must pass the National Standard General Building Contractor exam. The exam is based on the International Code Council’s 2018 International Building Code and International Residential Code. Applicants schedule with Pearson Vue. Exam fee is $115.
APPLY FOR LICENSE: Print out the contractor license application PDF. Return completed applications to:
City of Rapid City Building Services Division
300 Sixth Street
Rapid City, SD 57701
PAY LICENSE FEE: Residential building contractors pay a $200 initial license fee, with a check payable to “City Finance.”
Getting a residential or specialty license
The process of getting a residential or specialty license depends on the requirements of the locality where you’re applying.
In Sioux Falls, the residential building contractor and roofing and repair contractor use the same license application and follow the same application process.
In Rapid City, the application process for a Class A commercial and residential contractor license and a Class B residential contractor are the same, but the licenses have different exam requirements. The city’s contractor application also includes several other specialty contractor licenses.
Additional trades in the construction industry require state licensing. The South Dakota Plumbing Commission issues journeyman plumber and plumbing contractor licenses. The South Dakota Electrical Commission issues apprentice electrician, journeyman electrician, and electrical contractor licenses.
For more information, you can also consult our guides to getting your HVAC license, plumbing license, or electrician license in South Dakota.
What Are the Requirements of a South Dakota Contractor License?
The requirements for licensure as a contractor in California are all intended to demonstrate that an individual who will be serving the public is properly prepared to do the job right. To that end there are age, knowledge/experience, and financial prerequisites. These are the requirements for a residential building contractor in Sioux Falls.
Register your business with the South Dakota Secretary of State.
Obtain a state contractor’s excise tax license.
Pass a construction supervisor examination.
Obtain a $20,000 compliance bond.
Obtain a minimum of $300,000 in general liability insurance.
If working out of your home, obtain a home occupation permit.
Meet state workers’ compensation insurance requirements.
Pay license application fee.
How Long Does It Take to Get a Contractor License in South Dakota?
The time it takes to get a contractor license in South Dakota depends on the requirements of each locality. In Sioux Falls and Rapid City, applicants must pass an exam before obtaining their license. In Sioux Falls, applicants have 90 days to apply for their license after passing their examination.
What Business Owners Need to Know
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How Much Does It Cost to Get a Contractor License in South Dakota?
The amount it costs to get a contractor license depends on the license and the city where you’re applying. In Sioux Falls, a Residential Building Contractor License costs $300, but the fee is prorated depending on when you apply for the license. Applicants must also pay a $75 exam fee.
In Rapid City, the initial license fee for a general contractor or residential contractor is $200. General contractor applicants must also pay a $115 exam fee.
South Dakota Contractor License Training Programs and Schools
While there are no specific educational or course requirements to get a contractor license in South Dakota, many training programs throughout the state can help you prepare for a career in construction.
If you choose to start your career path at a college or university, you can pursue a degree in construction management or construction engineering. There are many higher education options throughout the Mount Rushmore State offering these types of programs.
The following schools offer a Construction Management or a Civil and Environmental Engineering Bachelor of Science degree.
South Dakota community and technical colleges provide many locations throughout the state to pursue a degree or diploma in the areas of construction and the trades.
If you don’t attend any formal schooling or training, but want to learn on the job, you may want to consider an apprenticeship. The South Dakota Department of Labor and Regulation lists registered apprenticeship information and opportunities throughout the state.
Other resources for finding South Dakota apprenticeships in the skilled trades include:
Through an apprenticeship, you work, accumulate necessary experience, and can earn money all at the same time. The length of time to complete an apprenticeship depends on the trade and program.
Does South Dakota Reciprocate Contractor Licenses?
Reciprocal agreements depend on the rules of each locality. Sioux Falls does not reciprocate any licenses, so all contractors will need to pass an examination and complete a contractor application. Check with each locality where you plan to work to ensure you meet licensing requirements.
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Do I Need to Renew my Contractor License in South Dakota?
Renewal requirements vary based on city or county requirements.
In Sioux Falls, licenses expire on March 1 of every third year. To renew, residential building contractors must provide current bond and insurance information. Construction supervisors, who are the license holders, must complete one hour of continuing education during the license cycle before renewal. The license cannot be renewed 12 months from expiration without re-examination, unless the construction supervisor applied for an inactive license. License renewal is $300 for a three-year license.
In Rapid City, general and residential contractor licenses must be renewed every three years. The city does not send out renewal notices, so contractors need to know when their licenses expire. Contractors complete a renewal application, which includes the completion of six hours of continuing education. The renewal fee for general and residential contractor licenses is $100.
Are There Any Penalties for Contracting Without a License in South Dakota?
Yes. The penalties for unlicensed contractors depend on the rules in each locality. For instance, in Rapid City, it’s unlawful for contractors to work without being licensed. Those who do are guilty of a misdemeanor and could face fines and/or jail time, according to city code.
National Certifications
Other certifications can help you demonstrate your proficiency to potential employers and clients. There are many professional organizations that offer certification. These certifications are not required but can add to your marketability and therefore increase your opportunity to make more money.
Some of the top construction certifications are:
Occupational Safety and Health Administration (OSHA) Safety Certificate
Construction Management Association of America Certified Construction Manager (CCM)
National Association of Safety Professionals (NASP) Certified Safety Manager (CSM) certification
National Center for Construction Education & Research (NCCER)
Continuing Education
In South Dakota, general contractor continuing education requirements depend on individual city or county rules. Both Sioux Falls and Rapid City require contractors to obtain continuing education.
In Sioux Falls, residential building contractors must obtain one hour of continuing education during the three-year license cycle. Construction supervisors, who hold the license, complete the continuing education certificate before their license expires.
In Rapid City, general building contractors must obtain six hours of continuing education per license cycle. Contractors can show proof of continuing education through a certificate of completion or a letter on a letterhead from the company providing the class identifying the class taken, date, and number of credit hours.
In addition to continuing education requirements, contractors will want to stay informed about emerging technology in the industry. There are many ways to keep yourself current in regard to the technology put to use in construction, roofing, energy and environmental designs, efficiency standards, and more. For example, distributors want you to know about their company’s latest offerings and will often hold training sessions about new and changing equipment and parts. Another option to stay in the know is continuing education courses with the Associated General Contractors of America (AGC).
Resources
You can stay up to date on contracting industry news several ways:
Check top blogs, including ServiceTitan’s blog.
Read about the latest industry trends, and discover ideas on how to grow your business.
Listen to top podcasts like ServiceTitan’s “Toolbox for the Trades” podcast.
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