How to Start a Landscaping Business in South Dakota (2026)

Last updated: May 4, 2026

South Dakota’s landscaping market has two key structural features to understand before you start. First, landscaping services are taxable in South Dakota at the 4.2% state rate plus municipal taxes — unlike most neighboring states where landscaping labor is exempt from sales tax. You must collect sales tax on mowing, lawn care, snow removal, and general grounds maintenance before your first job. Second, the state is divided by the Missouri River into two distinct plant environments: the humid east river region (Sioux Falls, Brookings, Aberdeen) with conventional lawn and turf services, and the drier, rockier west river region (Rapid City, Black Hills) where xeriscape and native plant work is increasingly common.

Beyond the sales tax requirement and the DANR Commercial Pesticide Applicator license (required if you apply pesticides, $35/2-year), there is no state landscaping contractor license in South Dakota. The SD 811 dig-safety notification requirement (SDCL 49-7A, 2 working days advance notice before any excavation) applies to irrigation installation and any below-grade work.

Landscaping Requirements in South Dakota at a Glance

Requirement	Agency	Cost	Timeline
State landscaping contractor license	N/A — not required in SD	Not required	N/A
LLC formation	SD Secretary of State	$150 online + $55/year annual report	~1 business day
Sales tax license (required)	SD Department of Revenue	Free	Before first job
Commercial Pesticide Applicator license	SD DANR	$35 per 2-year license	After passing Category G + category exam
SD 811 dig-safety notification	SD One Call (sdonecall.com)	Free per ticket	2 full working days before any excavation
Local business license	City hall / county clerk	Varies by city	Before operating
General liability insurance	Private carrier	~$800-$2,500/year	Before operating
Workers’ comp (voluntary)	Private carrier / NCCI 0042	Varies by payroll	Recommended before hiring
Contractor’s Excise Tax License (if construction work)	SD Department of Revenue	Free; 2% tax on construction receipts	If performing installation/construction

How to Start a Landscaping Business in South Dakota (Step by Step)

Step 1: Form a South Dakota LLC

File Articles of Organization with the SD Secretary of State online for $150 at sosenterprise.sd.gov. Annual report: $55/year on formation anniversary. An LLC is essential for landscaping — you operate equipment on client property, handle chemicals, and can cause significant property damage. Apply for a free EIN at irs.gov. Register a DBA at your county Register of Deeds ($10, 5 years) if needed. Open a dedicated business bank account.

Step 2: Register for a South Dakota Sales Tax License

Unlike most states, South Dakota taxes landscaping services. The state taxes “the sale of all services,” which includes lawn mowing, fertilization, weed control, sprinkler system maintenance, snow removal, tree trimming, and general grounds maintenance. You must collect the 4.2% state rate plus applicable municipal tax on every landscaping service invoice.

Register for a free sales tax license at dor.sd.gov before your first job. Combined rates: Sioux Falls and Rapid City at 6.2% (4.2% + 2% municipal). Rural/unincorporated areas at 4.2% state only.

Contractor’s Excise Tax for installation work

If your work includes installing irrigation systems, retaining walls, patios, or other construction on real property, you may also owe the Contractor’s Excise Tax — a 2% tax on gross construction receipts. Obtain a free Contractor’s Excise Tax License from the SD DOR. The correct treatment depends on whether the work is classified as a service or construction. Consult the SD DOR if you regularly perform installation work alongside maintenance services.

Step 3: DANR Commercial Pesticide Applicator License

If your landscaping business applies pesticides commercially — herbicides, fungicides, insecticides, or any other pest control chemicals on a client’s property — you must hold a Commercial Pesticide Applicator license from the South Dakota Department of Agriculture and Natural Resources (DANR).

• License fee: $35 per 2-year license
• Renewal deadline: Last day of February in the expiration year
• Apply/renew online: apps.sd.gov/doa/ecat3/index.htm

You must pass two exams before purchasing your license:

1. Category G (General/Core) exam: Required for all commercial applicators; covers pesticide safety, label reading, application techniques, and environmental protection.
2. Category-specific exam: For landscaping and lawn care, Category 3 (Ornamental and Turf) is the relevant category. Covers pesticide use on ornamental plants, turf grass, and landscaped areas.

SDSU Extension’s commercial applicator training program provides study materials at extension.sdstate.edu. Exams are offered at testing sites listed on the DANR website.

The license is required when you apply pesticides on client property for compensation. Mowing without any chemical applications does not require the license. A single pre-emergent weed control application on a client’s lawn does require it.

Step 4: South Dakota 811 — Call Before You Dig

Any landscaping work involving excavation — irrigation system installation, drainage work, planting large trees, or any below-grade activity — requires a SD 811 locate request under SDCL 49-7A.

• Notice required: At least 2 full working days before excavation
• Weekends/holidays excluded from the 2-day calculation
• How to notify: Call 811 or submit a ticket at sdonecall.com
• Utility response: SD 811 notifies affected utilities, which must mark underground lines within 2 hours during business hours (4 hours outside)
• Do not dig before the start time on the ticket

Striking an underground utility due to failure to call 811 can result in SD Public Utilities Commission fines, repair costs, and liability for service interruption. Build an 811 ticket into every irrigation installation job as a standard step.

Step 5: Local Business Licensing

South Dakota has no statewide general business license or landscaping contractor license. Contact city hall or the county clerk in each city where you operate. Sioux Falls requires local business licensing; Rapid City has its own requirements. Businesses operating on tribal trust land may need tribal licensing — contact the relevant tribe’s business or economic development office for reservation properties.

Step 6: Insurance and Workers’ Compensation

General liability insurance

Carry at minimum $1M per occurrence general liability coverage. Commercial clients and property managers typically require $2M. Annual cost for a small landscaping crew: approximately $800-$2,500/year. Commercial vehicle insurance is required for any vehicle used in the business.

Workers’ compensation — voluntary in South Dakota

The SD DLR states: “There is no law in South Dakota requiring any employer to carry workers’ compensation insurance.” Workers’ comp is legally optional in SD. Landscaping involves real injury risk — equipment accidents, heat exhaustion, chemical exposure, back injuries — and uninsured employers can be sued for full injury damages in civil court. Most landscaping businesses with employees carry voluntary workers’ comp. NCCI class code 0042 applies to landscaping work.

Step 7: Hire Employees — Payroll Compliance

Register with SD DLR for Reemployment Assistance (UI) before the first employee. New ER rate: 1.2% on a $15,000 wage base (2026). Minimum wage: $11.85/hour in 2026 (CPI-indexed annually). Report new hires within 20 days to the SD DLR New Hire Registry. South Dakota has no state income tax, so no state income tax withholding from paychecks — payroll obligations are federal-only.

East River vs. West River: Two Different Landscaping Markets

East river South Dakota (east of the Missouri River) includes Sioux Falls, Brookings, Aberdeen, and the James River Valley. Deeper topsoil, more annual precipitation, and conventional lawn and turf management is the norm. Mowing contracts, fertilization programs, weed control, spring/fall cleanups, and snow removal are standard services. Sioux Falls is the largest commercial and residential market, with growing demand from healthcare and financial services sectors.

West river South Dakota (west of the Missouri River) includes Rapid City, the Black Hills, and western rangeland. Shallower rocky soils, lower precipitation, and native plant/xeriscape landscaping is increasingly common and in demand. The Black Hills tourism economy creates seasonal maintenance demand at commercial properties. Sturgis Rally week each August drives short-term intensive demand near Sturgis in Meade County.

Tribal land: Pine Ridge, Rosebud, Cheyenne River, and Standing Rock reservations cover large areas of western and north-central SD. Landscaping on tribal trust land may require tribal business licensing. Contact the relevant tribe’s business office for reservation properties.

Cost to Start a Landscaping Business in South Dakota

Item	Cost	Notes
LLC formation	$150	One-time; $55/year annual report
Sales tax license	Free	Required before first job
DANR Pesticide Applicator license	$35/2 years	If applying pesticides; renew by Feb 28/29
Exam fees	Varies by testing site	Category G + Category 3
Local business license	$0-$100/year	Varies by city
General liability insurance	$800-$2,500/year	$1M per occurrence minimum
Commercial vehicle insurance	Varies	Required for business vehicle use
Mower, trailer, basic equipment	$3,000-$25,000+	One-time; varies by operation size
Workers’ comp (voluntary, if hiring)	Varies by payroll	Not legally required; recommended
Year 1 Total (solo, no employees)	~$1,500-$4,000	LLC + license + insurance (not counting equipment)

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 Hair Salon in South Dakota
• How to Become a Private Investigator in South Dakota

← Back to all South Dakota business guides

Frequently Asked Questions

Is there a state landscaping contractor license in South Dakota?

No. South Dakota has no state landscaping contractor license, irrigation contractor license, or hardscape contractor license. The only state license relevant to most landscaping businesses is the DANR Commercial Pesticide Applicator license ($35/2 years), required if you apply pesticides commercially. No state license board approval is required to operate a landscape maintenance business.

Do landscaping services have to collect sales tax in South Dakota?

Yes. South Dakota taxes the “sale of all services,” including lawn mowing, fertilization, weed control, snow removal, and grounds maintenance. The state rate is 4.2%. Municipal taxes add 1-2% in most cities (6.2% combined in Sioux Falls/Rapid City). Register for a free sales tax license at dor.sd.gov before your first job.

What is required to apply pesticides commercially in South Dakota?

A DANR Commercial Pesticide Applicator license is required ($35/2-year). Pass Category G (general core) exam plus Category 3 (Ornamental and Turf) exam. Renew by last day of February in expiration year. Apply and renew at apps.sd.gov/doa/ecat3/index.htm. SDSU Extension provides study materials at extension.sdstate.edu.

How much advance notice is required before digging for irrigation systems in South Dakota?

South Dakota One Call (SD 811) under SDCL 49-7A requires at least 2 full working days advance notice. Weekends and holidays don’t count. Call 811 or submit online at sdonecall.com. Utility operators must mark underground lines within 2 hours during business hours. Do not begin digging before the start date/time on your ticket.

Is workers’ compensation required for landscaping employees in South Dakota?

No. Workers’ comp is voluntary in South Dakota — the SD DLR states there is no law requiring it. But landscaping involves real injury risk, and uninsured employers can be sued for full injury damages in civil court. Most landscaping businesses with employees carry voluntary workers’ comp. NCCI class code 0042 applies to landscaping.

How does the east river/west river divide affect landscaping services?

East river (Sioux Falls, Brookings, Aberdeen): deeper soils, higher rainfall, conventional lawn and turf services are the norm. West river (Rapid City, Black Hills): shallower rocky soils, lower rainfall, native plant and xeriscape work is increasingly in demand. Pesticide products, irrigation design, and plant selection differ significantly between the two regions. Know which market you’re in before building your service menu.