How to Start a Hair Salon in South Dakota (2026)

Last updated: February 26, 2026

Opening a hair salon in South Dakota requires two levels of licensing: an individual cosmetologist license for every practitioner who works in the salon, and a salon establishment permit for the business itself. Both are issued by the South Dakota Cosmetology Commission, a division of the Department of Labor and Regulation. A new salon opens with a 90-day initial permit ($75), which triggers an inspection. If you pass, you receive the full salon license and renew annually at $45. Individual cosmetologist licenses cost $125 initially and $50 to renew. New fees took effect July 1, 2025 under Senate Bill 27. This guide covers every requirement for opening a South Dakota hair salon in 2026.

Hair Salon Requirements in South Dakota at a Glance

Requirement	Agency	Cost	Timeline
LLC formation (recommended)	SD Secretary of State	$150 online + $55/year annual report	1 business day
Salon initial permit (90-day)	SD Cosmetology Commission	$75	Before opening; inspection within 90 days
Salon license renewal (annual)	SD Cosmetology Commission	$45/year	Annual
Individual cosmetologist license (initial)	SD Cosmetology Commission	$125	After completing required training
Individual cosmetologist license (renewal)	SD Cosmetology Commission	$50/year	Annual
Sales tax license	SD Department of Revenue	Free	Before first taxable service
General liability insurance	Private carrier	~$500-$1,500/year	Before opening
Workers’ compensation (if hiring)	SD Department of Labor and Regulation	Varies by payroll	Before first employee

How to Start a Hair Salon in South Dakota (Step by Step)

Step 1: Individual Cosmetologist Licenses

Every practitioner who performs cosmetology services in a South Dakota salon must hold a current individual license from the South Dakota Cosmetology Commission. This requirement applies to the owner as well as every employee stylist, colorist, or esthetician working in the salon.

Current license fees (effective July 1, 2025 – Senate Bill 27):

• Initial cosmetologist license: $125
• Annual renewal: $50
• Initial esthetician license: $125
• Initial nail technician license: $125

A cosmetologist license requires completion of an accredited cosmetology program (typically 1,500 hours in South Dakota), passing the state licensing examination, and submitting a license application to the Commission.

Contact the SD Cosmetology Commission at dlr.sd.gov/cosmetology, located at 217 W. Missouri Ave, Pierre, SD 57501. Do not allow any unlicensed person to perform cosmetology services in your salon – doing so violates state law and risks your salon license.

Step 2: Form an LLC and Register Your Business

File Articles of Organization with the South Dakota Secretary of State for $150 online at sosenterprise.sd.gov. Annual report: $55/year due on your formation anniversary date.

A salon involves chemical services, potential client injuries (burns, allergic reactions), and significant liability. The LLC protects your home, savings, and personal assets from business-related lawsuits.

Apply for a free EIN from the IRS at irs.gov.

If you operate under a trade name (e.g., “Prairie Beauty Studio”), register a fictitious name at your county Register of Deeds office for $10 – valid 5 years.

Step 3: Apply for Your Salon Initial Permit

Before opening your salon, apply for a new salon initial permit from the SD Cosmetology Commission:

• Initial permit fee: $75 (effective July 1, 2025; previously $60)
• This is a 90-day permit that allows you to operate while the Commission schedules your inspection
• The application requires your business name, location, owner information, and license fees

Apply through the SD Cosmetology Commission at dlr.sd.gov/cosmetology/licensing_requirements.aspx.

Step 4: Pass Your Cosmetology Commission Inspection

During the 90-day initial permit period, a state inspector will visit your salon. The inspection covers:

• Sanitation of tools, surfaces, and equipment (towels, capes, combs, scissors, etc.)
• Proper disposal of sharps (razor blades, needles)
• Adequate ventilation and lighting
• Handwashing facilities
• Storage of chemicals and products
• Compliance with all applicable SD Cosmetology Commission regulations

Pass the inspection and your full salon license is issued. The annual renewal fee is $45 (effective July 1, 2025; previously $40).

Step 5: Register for Sales Tax

Hair salon services and the retail sale of hair care products are subject to South Dakota’s 4.2% state sales tax. Register for a free sales tax license with the SD Department of Revenue at dor.sd.gov/businesses/taxes/sales-use-tax before your first client.

Note: South Dakota’s 4.2% rate applies statewide. Some cities and municipalities add a local sales tax – check the combined rate for your salon’s location.

South Dakota has no state income tax, so your salon profits are not subject to state income taxation – a significant benefit compared to most states.

Step 6: Insurance and Workers’ Compensation

• General liability insurance: Covers client injuries (slips, chemical burns, allergic reactions from products) and property damage. $1M per occurrence recommended. Annual cost: approximately $500-$1,500 for a small salon.
• Professional liability (errors and omissions): Covers claims that your services caused harm – a chemical treatment that damaged a client’s hair, or a service outcome that doesn’t meet expectations. Consider adding this coverage.
• Workers’ compensation: Required for most South Dakota employers as soon as you have any employee (including a booth renter who is classified as an employee rather than independent contractor). Contact the SD Department of Labor and Regulation at dlr.sd.gov/workers_compensation (605-773-3681).

Cost to Open a Hair Salon in South Dakota

Item	Cost	Notes
LLC formation	$150	One-time; $55/year annual report
Registered agent	$49-$150/year	Annual
Salon initial permit (90-day)	$75	One-time; includes inspection period
Salon license annual renewal	$45/year	Annual
Individual cosmetologist license (per stylist)	$125 initial / $50 renewal	Per licensed practitioner
Sales tax license	Free	Required before first service
General liability insurance	$500-$1,500/year	Annual
Salon equipment and furnishings	$5,000-$30,000+	Styling chairs, shampoo bowls, dryers, mirrors
Leasehold improvements	$5,000-$50,000+	Varies by space condition and size
Year 1 Total (small salon, 2-3 chairs)	~$15,000-$85,000	Licenses + equipment + build-out + insurance

Estimated total startup cost: $15,000-$85,000+ depending on salon size and buildout needed

Related South Dakota Business Guides

• How to Start a Cleaning Service in South Dakota
• How to Start a Food Truck in South Dakota
• How to Start a Daycare in South Dakota
• How to Start an HVAC Business in South Dakota
• How to Start a Landscaping Business in South Dakota
• How to Become a Private Investigator in South Dakota

← Back to all South Dakota business guides

Frequently Asked Questions

What license does a hair salon need in South Dakota?

A hair salon in South Dakota needs: (1) an individual cosmetologist license ($125 initial, $50/year renewal) for every practitioner, and (2) a salon establishment permit ($75 initial 90-day permit, $45/year after) from the South Dakota Cosmetology Commission. The salon permit triggers an inspection during the 90-day period. Contact the Commission at dlr.sd.gov/cosmetology.

How much did South Dakota salon licensing fees change in 2025?

The South Dakota legislature passed Senate Bill 27 in 2025, authorizing the Cosmetology Commission to raise fees. Effective July 1, 2025: the initial salon permit increased from $60 to $75, the salon annual renewal increased from $40 to $45, individual cosmetologist initial license increased to $125, and renewal increased to $50. These are the current 2026 fees.

Can an unlicensed person work in a South Dakota hair salon?

No. Every person who performs cosmetology services in a South Dakota salon must hold a valid individual license from the SD Cosmetology Commission. Allowing unlicensed practice violates state law, can result in fines, and puts your salon license at risk. Verify the license status of every stylist before they begin working in your establishment.

Do South Dakota hair salons need to collect sales tax?

Yes. Hair salon services and retail product sales are subject to South Dakota’s 4.2% state sales tax. Register for a free sales tax license with the SD Department of Revenue at dor.sd.gov before your first client. South Dakota has no state income tax, so your salon profits are not subject to state income taxation.

What happens if a South Dakota salon fails the Cosmetology Commission inspection?

If your salon does not pass the inspection during the 90-day initial permit period, the Commission will identify the deficiencies you must correct. You will need to address those issues and schedule a re-inspection before a full salon license can be issued. You cannot continue operating past the 90-day permit expiration without a valid license.