How to Get a South Dakota Liquor License

Last updated: September 11, 2026

South Dakota licenses bars twice over, but the decision is local. The city or county council receives the application, holds the hearing, decides how many on-sale licenses to allow and what to charge, and the secretary of revenue signs off afterward. Under SDCL 35-2-1.2 an applicant for a new retail license or a transfer files with “the governing body of the municipality in which the applicant intends to operate,” or the county outside city limits, with the fee attached; no retail license issues until a public hearing has been held (35-2-3), and if the local body approves, the license takes effect once the secretary approves it (35-2-5.2). Section 35-4-11 lets each municipality fix, before September 2 each year, the number of on-sale licenses it will approve and the fee for them, subject to a quota of three on-sale licenses for the first thousand residents and one more for each additional fifteen hundred, and 35-4-2 sets the fee floor at $1 for each resident counted in the last federal census, with renewals capped at fifteen hundred dollars. A full-service restaurant can be licensed outside the quota if the city adopts an ordinance under 35-4-111. The state adds two things a new operator should understand: no sales between 2 a.m. and 7 a.m., and a statute declaring that a licensee is not civilly liable for injuries caused by an intoxicated patron.

Training: No State Server Permit, but Certification Cuts the Penalty and Is Required for Under-21 Pourers

Title 35 does not require a bartender to hold a state permit or complete a course before serving. It does reward certification. Under SDCL 35-2-10.1, when an employee sells or serves to someone under 21 and the licensee has had no more than two such violations at that premises in the previous 24 months, the license may not be revoked or suspended; instead the secretary imposes a civil penalty of five hundred dollars for a first violation and one thousand for a second. But if the employee “has not been certified by a nationally recognized training program approved by the department” on preventing underage purchases, the penalty doubles to one thousand and two thousand dollars. Certification is mandatory in one case: under 35-4-79.4 a licensee may let employees aged 18 to 20 sell or serve alcohol if less than fifty percent of gross business is alcohol or a 21-year-old is on the premises, but anyone under 21 who is “tending bar or drawing, pouring, or mixing alcoholic beverages” must be certified by a nationally recognized alcohol management program.

The conduct rules are strict even where the civil exposure is not. Section 35-4-78 provides that “no licensee may sell or serve any alcoholic beverage to any person who is obviously intoxicated,” a Class 1 misdemeanor. Section 35-4-79 makes it a Class 2 misdemeanor to let anyone under 21 loiter on the premises or sell, serve, dispense or consume alcohol there. Section 35-4-81.2 bars any on-sale or off-sale licensee from selling, serving or allowing consumption between 2 a.m. and 7 a.m., and 35-4-81 lets a city or county restrict sales on Sundays, Christmas Day or Memorial Day by ordinance. Under 35-2-10 the secretary may suspend or revoke a license for violating any provision of Title 35, any department rule, or any local ordinance on alcohol, and a licensee holding several licenses for the same premises must shut them all down for the same period.

Who Decides, and What It Costs

The application goes to the city finance officer or, outside a municipality, the county auditor, on the Department of Revenue’s uniform form. The Department tells applicants for an on-sale license to “contact your local finance officer for the availability of licenses, the cost and what the local process is for obtaining a license,” because both the count and the price are local decisions. Under 35-4-11 the municipality sets the number of on-sale and off-sale licenses it will approve for the coming calendar year and the fees, if not already fixed by ordinance, before September 2; under 35-4-11.1 the county commissioners do the same for unincorporated territory. The governing body may approve the application if it considers “the applicant suitable to hold the license and the proposed location is suitable,” and may deny an on-sale application that would give one person more than one-third of the licenses available in the jurisdiction (35-2-1.2). A denial is endorsed on the application with reasons and returned with the fee, and the applicant may not reapply for a year, or for three months at a different location if the denial was about the site (35-2-5.1). The local body may also refuse to reissue an on-sale license that has not been “actively used” in the previous two years, meaning open to the public for at least 60 days (35-2-5.3). Every application carries the applicant’s agreement that the premises and its alcohol records are open to inspection by the secretary, the attorney general and local law enforcement (35-2-2.1).

Section 35-4-2 lists the license classes and their fees. The on-sale license in a municipality costs “not less than one dollar for each person residing within the municipality as measured by the last preceding federal census,” with the renewal fee capped at fifteen hundred dollars; a convention facility on-sale license uses the same formula. An on-sale license outside a municipality costs what the nearest municipality charges for a like license. An off-sale package license is not less than $300, with renewals capped at $500. A malt beverage and South Dakota farm wine retailer license is $300, a wine and cider retailer license five hundred dollars, and the wholesaler license the Department itself issues is $5,000. The fee is paid to the city or county and deposited in its general fund.

The Quota, and the Restaurant Way Around It

Under 35-4-11 the number of municipal on-sale licenses “may not exceed three each for the first one thousand of population or fraction thereof and may not exceed one each for each additional one thousand five hundred of population or fraction thereof,” using the Census Bureau’s even-year estimates and the decennial count in a census year; a city may never drop below the number it had issued on July 1, 1981. Counties use the same ratio for the population outside incorporated towns, and a county off-sale license may not be issued within three miles of a municipality (35-4-11.1). Off-sale licenses have their own quota in 35-4-10. The legislature opened a second door in 2008: under 35-4-111 a city or county may by ordinance issue additional on-sale licenses to full-service restaurants beyond the quota, provided it charges at least the minimum fee in 35-4-116, which is one dollar per resident, and once set that fee is frozen for ten years unless the census forces an increase. A restaurant license issued this way renews at the ordinary on-sale renewal fee and is otherwise treated as a regular on-sale license.

What It Costs

License or requirement	Who sets it	Amount
Retail on-sale license (municipal)	City sets the fee and the number before September 2 (35-4-11); statutory floor in 35-4-2(4)	Not less than $1 per resident at the last federal census; renewal capped at fifteen hundred dollars
Retail on-sale license (county)	County commissioners; fee equals the nearest municipality’s fee for a like license (35-4-2(6))	Set locally
Full-service restaurant on-sale license (outside the quota)	City or county ordinance under 35-4-111; minimum in 35-4-116, frozen for ten years	At least $1 per resident
Off-sale package license	City or county; statutory floor and renewal cap (35-4-2(3))	Not less than $300; renewal not more than $500
Malt beverage and South Dakota farm wine retailer	Statute; paid to the local governing body	$300
Wholesaler license	Department of Revenue (35-4-2(2))	$5,000
Public hearing	Required before any retail license issues (35-2-3); residents may request mailed notice (35-2-4)	No separate fee in statute
Underage sale by an uncertified employee	Secretary of revenue (35-2-10.1); halves if the server was certified	One thousand dollars first violation; two thousand second
South Dakota LLC	Articles of Organization; annual report	$150 online ($165 by paper); annual report $55 online ($70 by paper)

A Quota With a Restaurant Exception and a Statute That Ends Dram Shop Liability

South Dakota’s mechanics look like several other Plains and Mountain states: a population ratio limits the number of full on-sale licenses, the city decides how many of its allotment to issue and what to charge, and a state agency approves after the local vote. The details that matter to a new operator are the floor rather than the ceiling on the fee, since the statute names a minimum per resident and leaves the top to the council, and the 2008 full-service restaurant statute, which lets a city that has run out of quota licenses keep licensing restaurants by ordinance at the same per-resident minimum, frozen for a decade. A stand-alone bar competes for a quota slot; a restaurant can be licensed by ordinance in a city that chooses to.

The liability rule is where South Dakota parts company with most of the states on this site. Section 35-11-1 states the legislature’s finding “that the consumption of alcoholic beverages, rather than the serving of alcoholic beverages, is the proximate cause of any injury inflicted upon another by an intoxicated person,” and abrogates the 1982 Walz v. City of Hudson decision that had allowed such suits. Section 35-4-78 then says it directly: although selling to an obviously intoxicated person is a Class 1 misdemeanor, “no licensee is civilly liable to any injured person or the injured person’s estate for any injury suffered, including any action for wrongful death, or property damage suffered because of the intoxication of any person due to the sale or consumption of any alcoholic beverage in violation of the provisions of this section.” States such as Rhode Island and Connecticut give an injured third party a statutory claim against the bar; South Dakota removes it by statute and leaves the licensee facing the criminal charge, the administrative penalty and the license action instead. That does not make liquor liability insurance pointless, since claims arising outside the statute’s terms, in other states, or under a lease or lender requirement remain, but it changes what the policy is defending against.

How to Get Licensed, In Order

1. Ask the city finance officer or county auditor how many on-sale licenses are available for the coming year, what the council set as the fee, and whether the city has adopted a full-service restaurant ordinance under 35-4-111.
2. Form the entity — South Dakota Articles of Organization are $150 filed online ($165 by paper), and the annual report is $55 online.
3. Complete the Department of Revenue’s uniform application (Form 2086) and file it with the local governing body with the fee attached, including the statutory agreement that the premises and records are open to inspection.
4. Attend the public hearing required by 35-2-3; residents who asked for notice will have been mailed the time and place.
5. Get the council’s endorsement, which turns on whether the applicant and the location are suitable and whether you would hold more than one-third of the local licenses; a denial means a one-year wait, or three months at a new location.
6. Wait for the secretary of revenue’s approval, after which you may operate for the licensing year under 35-2-5.2.
7. Certify the staff through a nationally recognized program, mandatory for any 18-to-20-year-old who pours and worth half the penalty if anyone slips on an ID check.

Staying Licensed

Use the license or risk losing it. Under 35-2-5.3 the local body may refuse to reissue an on-sale license that was not open to the public at least 60 days during the previous two years.

Keep to the hours. No sales, service or consumption between 2 a.m. and 7 a.m. under 35-4-81.2, plus whatever Sunday, Christmas or Memorial Day limits the city or county adopts.

Watch the two-violation window. The reduced penalties in 35-2-10.1 apply only while the premises has had no more than two underage-sale violations in 24 months; past that, suspension or revocation is back on the table.

A transfer is a new application. Section 35-2-1.2 routes the transfer of an existing license through the same local approval as a new one.

File the annual report. The Secretary of State’s annual report is $55 online, and a delinquent report adds a $50 late fee per report.

Frequently Asked Questions

How much is a liquor license in South Dakota?

The city sets it, above a statutory floor. Under SDCL 35-4-2 a municipal on-sale license costs not less than one dollar for each resident counted in the last federal census, with the renewal fee capped at fifteen hundred dollars; under 35-4-11 the municipality fixes the actual fee and the number of licenses each year before September 2. An on-sale license outside a city costs what the nearest municipality charges. An off-sale package license is not less than $300 with renewals capped at $500, and the Department of Revenue’s wholesaler license is $5,000.

Who issues liquor licenses in South Dakota?

The city or county approves and the Department of Revenue confirms. Under 35-2-1.2 the application for a new retail license or a transfer goes to the governing body of the municipality, or the county outside city limits, with the fee; 35-2-3 requires a public hearing first; and under 35-2-5.2 the license is effective for the licensing year once the secretary of revenue approves the locally endorsed application. The Department directs on-sale applicants to their local finance officer or county auditor for availability, cost and process.

Is there a limit on liquor licenses in South Dakota?

Yes. Under 35-4-11 a municipality may issue no more than three on-sale licenses for the first thousand residents and one for each additional fifteen hundred, based on Census Bureau estimates, and never fewer than it had issued on July 1, 1981; counties apply the same ratio to residents outside incorporated towns under 35-4-11.1. Since 2008, 35-4-111 has let a city or county issue additional on-sale licenses to full-service restaurants by ordinance outside that quota, provided it charges at least one dollar per resident and holds that fee for ten years.

Do bartenders need a license in South Dakota?

Not a state permit. Title 35 sets no server license or mandatory course, but 35-4-79.4 requires any employee aged 18 to 20 who tends bar or draws, pours or mixes drinks to be certified by a nationally recognized alcohol management program, and 35-2-10.1 halves the civil penalty for an underage sale when the employee who made it was certified by a department-approved program, from one thousand dollars to five hundred for a first violation. Check the issuing city for any local training ordinance.

What are the hours for alcohol sales in South Dakota?

Under 35-4-81.2 no on-sale or off-sale licensee may sell, serve or allow alcohol to be consumed on the premises between 2 a.m. and 7 a.m., a Class 2 misdemeanor. Under 35-4-81 a municipality or county may by ordinance prohibit or restrict sales, service and consumption on Sundays, Christmas Day or Memorial Day.

Can a South Dakota bar be sued for over-serving a customer?

Not under state statute. SDCL 35-4-78 makes selling or serving an obviously intoxicated person a Class 1 misdemeanor but provides that no licensee is civilly liable to any injured person or estate for injury, wrongful death or property damage caused by the intoxication of any person due to a sale in violation of the section, and 35-11-1 records the legislature’s finding that consumption rather than service is the proximate cause of such injuries and abrogates the Walz v. City of Hudson rule. The licensee still faces the criminal charge and, under 35-2-10, suspension or revocation.

What does a South Dakota LLC cost?

The Secretary of State’s fee schedule lists domestic Articles of Organization at $150 filed electronically or $165 by paper, and the annual report at $55 electronically or $70 by paper. A delinquent annual report carries an additional $50 late fee.

Forming the company, taxes, insurance, and hiring are covered in our full guide to starting a business in South Dakota.

Sources

Source	What It Covers
SDCL 35-4-2 — Classes of licenses enumerated; fees	The classes of licenses, with the fee of each class: wholesalers of alcoholic beverages, five thousand dollars; off-sale, not less than three hundred dollars, and the renewal fee may not exceed five hundred dollars; on-sale, not less than one dollar for each person residing within the municipality as measured by the last preceding federal census, and the renewal fee may not exceed fifteen hundred dollars; on-sale licenses issued outside municipalities, not less than the amount the nearest municipality is charging for a like license; wine and cider retailers, five hundred dollars; convention facility on-sale, not less than one dollar for each person residing within the municipality; malt beverage and wine produced by a farm winery licensee, three hundred dollars
SDCL 35-4-11 — Municipal determination of number of licenses and amount of fees; maximum number of on-sale licenses	If not fixed by ordinance, the governing body of any municipality may, before the second of September in each year, by resolution, determine the number of on-sale and off-sale licenses that the body will approve for the ensuing calendar year, and the fees to be charged; the number of on-sale licenses issued pursuant to subdivision 35-4-2(4) may not exceed three each for the first one thousand of population or fraction thereof and may not exceed one each for each additional one thousand five hundred of population or fraction thereof; the number allowable may not be less than the total allowable or issued as of July 1, 1981; population is equal to the Census Bureau estimates for each even-numbered year and the decennial census in a decennial year
SDCL 35-4-11.1 — Counties; number of licenses and amount of fees; number restricted by population	The board of county commissioners must, before the second of September in each year, determine the number of on-sale and off-sale licenses it will approve for the ensuing calendar year and the fees; the number of licenses issued pursuant to subdivision 35-4-2(6) may not exceed three for the first one thousand of population and may not exceed one for each additional fifteen hundred of population or fraction thereof; a county off-sale license may not be issued for a retailer located within three miles of the exterior boundary of an incorporated municipality; the population includes only those residing within the county but outside the incorporated municipalities
SDCL 35-4-111 — Full-service restaurant on-sale licenses	Notwithstanding the provisions of § 35-4-11 or 35-4-11.1 or the on-sale license fees established pursuant to subdivisions 35-4-2(4) and (6), the governing board of any incorporated municipality or the board of county commissioners of any county may, by ordinance, issue additional on-sale licenses for full-service restaurants if the municipality or county charges at least the minimum fee required by § 35-4-116; a full-service restaurant on-sale license issued in a municipality is subject to the license renewal fees provided in subdivision 35-4-2(4) and is treated for all other regulatory purposes as a license issued pursuant to subdivision 35-4-2(4)
SDCL 35-4-116 — Fees for additional on-sale licenses to full-service restaurants	Any municipality adopting such ordinance shall charge at least one dollar for each person residing within the municipality as measured by the last preceding decennial federal census; any county adopting such ordinance shall charge at least one dollar for each person residing within the county but outside the boundary of any municipality; after the fee has been determined, no municipality or county may change the fee for a period of ten years unless a growth in population reported by the federal decennial census requires an increase
SDCL 35-2-1.2 — Applications submitted to local governing body; fee; approval or disapproval	Any applicant for a new retail license or the transfer of an existing license shall submit an application to the governing body of the municipality in which the applicant intends to operate, or if outside the corporate limits of a municipality, to the governing body of the county; the applicant shall submit the required fee with the application; the governing body may approve the application if it considers the applicant suitable to hold the license and the proposed location is suitable; the governing body may disapprove an application for a license issued under subdivision 35-4-2(4), (6), or (13) if approval permits a person to possess more than one-third of the licenses available to be issued in the jurisdiction and possession of more than one-third is not in the public interest
SDCL 35-2-3 — Hearing required before issuance of retail license	No license for a retail on-sale or off-sale alcoholic beverage license may be issued to an applicant until a public hearing is conducted pursuant to §§ 35-2-4 and 35-2-5
SDCL 35-2-5.1 — Return of application disapproved by local governing body; waiting period	If the governing body of the municipality or county does not approve the application, the governing body shall endorse on the application the reasons for the denial and return the application and fee to the applicant; no further application may be received from the applicant until after the expiration of one year from the date of a denied application; if the application was denied based on the suitability of the location, no further application may be received until after three months if the subsequent application is for a different location
SDCL 35-2-5.2 — Approval of application by local governing body; approval by secretary required	If the governing body of the municipality or county approves the application, the governing body shall endorse the approval on the application; the licensee is entitled to operate under the license for the succeeding licensing year if the license is approved by the secretary; the license fee shall be deposited in the general fund of the municipality or county
SDCL 35-2-5.3 — Denying reissuance of on-sale license not actively used	The governing body of a municipality or county may deny reissuance of any on-sale license issued pursuant to subdivision 35-4-2(4), (6), or (13) to the same licensee or the licensee’s transferee if the license has not been actively used by the applicant during the two years preceding the date of the current application; actively used means the licensed premises was open to the public during regular business hours for the sale and consumption of distilled spirits for at least sixty days during the two preceding years
SDCL 35-2-10 and 35-2-10.1 — Revocation or suspension; conditions under which license may not be revoked for sale to persons under twenty-one; penalty	No retail license may be revoked or suspended because of a violation prohibiting the sale or service of any alcoholic beverage to a person under the age of twenty-one years if the violation was committed by an employee or agent of the licensee and the licensee has not had more than two violations on the premises in the previous twenty-four months; the secretary shall impose a civil penalty of five hundred dollars for a first violation and one thousand dollars for a second violation; however, if the employee or agent has not been certified by a nationally recognized training program approved by the department that provides instruction on techniques to prevent persons under the age of twenty-one years from purchasing or consuming alcoholic beverages, the secretary shall impose a civil penalty of one thousand dollars for a first violation and two thousand dollars for a second violation
SDCL 35-4-78 — Sale of alcoholic beverage to obviously intoxicated person prohibited; civil liability	No licensee may sell or serve any alcoholic beverage to any person who is obviously intoxicated; a violation of this section is a Class 1 misdemeanor; however, no licensee is civilly liable to any injured person or the injured person’s estate for any injury suffered, including any action for wrongful death, or property damage suffered because of the intoxication of any person due to the sale or consumption of any alcoholic beverage in violation of the provisions of this section
SDCL 35-11-1 — Legislative finding; abrogation of former rule	The Legislature finds that the consumption of alcoholic beverages, rather than the serving of alcoholic beverages, is the proximate cause of any injury inflicted upon another by an intoxicated person; therefore, the rule in Walz v. City of Hudson, 327 N.W. 2nd 120 (S.D. 1982) is hereby abrogated
SDCL 35-4-79 and 35-4-79.4 — Persons under twenty-one on licensed premises; exception for service by persons eighteen or older	No on-sale or off-sale licensee may permit any person less than twenty-one years old to loiter on the licensed premises or to sell, serve, dispense, or consume alcoholic beverages on the licensed premises; a violation is a Class 2 misdemeanor; notwithstanding § 35-4-79, any licensee may permit persons eighteen years or older to sell or serve alcoholic beverages if less than fifty percent of the gross business transacted by the establishment is from the sale of alcoholic beverages, or the licensee or an employee at least twenty-one years of age is on the premises; any person tending bar or drawing, pouring, or mixing alcoholic beverages pursuant to this section must be certified by a nationally recognized alcohol management program
SDCL 35-4-81 and 35-4-81.2 — Restriction by ordinance of sales on certain days; times when sales prohibited	Any municipality or county may, by ordinance, prohibit or restrict the sale, service, and consumption of alcoholic beverages on Sundays, Christmas Day, or Memorial Day; no on-sale or off-sale licensee may sell, serve, or allow to be consumed on the premises covered by the license, any alcoholic beverages between the hours of two a.m. and seven a.m.; a violation is a Class 2 misdemeanor
South Dakota Department of Revenue — Liquor Retailers and Other Liquor Licenses	Anyone selling alcoholic beverages, including beer, wine and spirits, for customers to consume on the licensed premises must purchase a Retail On-Sale Liquor License; contact your local finance officer for the availability of licenses, the cost and what the local process is for obtaining a license, or your local county auditor outside city limits; package off-sale fee schedule not less than $300, renewal may not exceed $500; malt beverage and South Dakota wine retailer license $300 payable to your local governing body; the fee for a wholesalers license is $5,000 payable to the Department of Revenue; Uniform Alcoholic Beverage License Application Form 2086
South Dakota Secretary of State — Filing fees	Limited Liability Company (LLC), domestic Articles of Organization filed electronically online $150, filed via paper (includes paper filing fee) $165; annual report filed electronically online $55, filed via paper $70
South Dakota Secretary of State — Annual report instructions	Customers who do not wish to electronically e-file their annual report may print the annual report and mail it in with an additional $15 paper processing fee; delinquent annual reports will incur an additional $50 late fee per annual report