How to Start a Barbershop in South Dakota

Who regulates barbershops in South Dakota

The licensing authority is the Board of Barber Examiners, a board in the Department of Labor and Regulation, administering South Dakota Codified Laws chapter 36-14 and its rules at ARSD 20:39. The board licenses barbers and barber shops, runs the examinations, and inspects shops annually. Its fees were amended in 2025, by Senate Bill 28 and a rules revision effective April 28, 2025: $225 for the initial barber license including the examination, $200 for the annual renewal of the certificate of registration, and shop fees priced by the chair as the license section below details. The board shares an office and a phone number with the Commission of Cosmetology in Pierre, which is where the resemblance ends.

The separation matters in practice. The Commission of Cosmetology licenses cosmetologists, estheticians and nail technicians under chapter 36-15, with different hours, fees and renewal dates, and neither board license substitutes for the other: a cosmetologist cannot work a barber chair on a cosmetology license, and a barber shop license does not license cosmetology services in the same room. The rest of the setup sits outside both boards. The Secretary of State takes the LLC Articles of Organization and the annual report. The Department of Revenue issues the sales tax license. The Department of Labor and Regulation also sets the minimum wage and runs reemployment assistance, and your city holds zoning, building permits and any local business license.

South Dakota barbershop at a glance

The barber license, step by step

The barber license under chapter 36-14 takes 1,500 hours of education, the same headline count as the cosmetologist, and then two examinations: the NIC Barber Styling Theory examination and a practical examination developed by the state. The scope those hours buy is the classic barber menu as the board states it: shaving or trimming the beard or cutting the hair, facial and scalp massages and treatments with oils, creams and lotions, singeing, shampooing and dyeing the hair and applying hair tonics, and applying cosmetic preparations, antiseptics, powders, oils, clays and lotions to the scalp, face, neck and upper part of the body. Chemical texture services beyond that menu, skin care and nail work sit in the cosmetology chapter, which is why a shop offering both traditions staffs both licenses.

The fee structure recently changed and older pages have not caught up. Senate Bill 28 and the 2025 rules revision set the initial license at $225, a figure that includes the cost of the examination itself, or a waiver of it for a reciprocity applicant, and the board examination application prints the same $225. The annual renewal of the certificate of registration is $200. Every barber license expires May 31 and must be renewed before June 1, a single statewide date that makes the barber calendar the simplest in South Dakota beauty licensing and the easiest to miss as a bloc, because the whole shop renews at once. An expired certificate restores for $30 plus a $25 penalty for each expired year, on top of the annual license fee. A barber arriving from another state applies by transfer at the same $225, and may receive 50 hours of work experience credit for each month practiced as a licensed barber elsewhere if the original education fell short of 1,500 hours.

The shop license for your premises

A barbershop must be licensed before it operates, and the shop license carries a condition no salon license in the cosmetology chapter states the same way: the shop must at all times be under the direct supervision and management of a registered barber. The license names the shop, is not transferable, and the board inspects shops annually under section 36-14-30. A change of ownership or location is therefore a new license conversation with the board, not an amendment to the old one.

The price is built per chair. For the initial license year the board charges $250 plus $20 for each barber chair in the shop. Renewal runs $225 plus $20 per chair, and the shop renewal application adds an annual shop inspection fee of $150, which the amended statute sets as the inspection price. A four chair shop therefore pays $330 to open and $305 plus the $150 inspection to renew, before any personal licenses. Late shop renewal adds a $30 restoration fee and a $25 expired license fee. Older board forms still circulating print superseded figures, a $50 shop license and a $125 inspection among them; the board current applications and the amended rules are the figures to budget from.

Forming your business: the LLC

Most South Dakota barbershops form a limited liability company, and formation is a single filing: Articles of Organization submitted to the Secretary of State for $150 filed electronically online, or $165 on paper, the paper price including the $15 paper filing fee printed on the Secretary of State fee schedule. The articles name the company and its registered agent, who must be a South Dakota resident with a physical and mailing address in the state.

The annual obligation is a report with an unusual deadline. The LLC files an annual report due on the first day of the anniversary month of formation, so a company formed in March owes its report the following March 1, and filing may begin two months early. The report costs $55 filed online or $70 on paper. The late fee for a delinquent annual report is $55, the same size as the online fee itself, and an LLC dissolved for nonfiling faces a $150 reinstatement fee plus the delinquent reports and fees. There is no state income tax in South Dakota, so the report and the federal filings are the whole recurring entity workload.

Registering your shop name

South Dakota handles trading names through a fictitious name statement under section 37-11-1, and the statute starts with the exception most shops use. A business whose name is already on file with the Secretary of State in a required business filing, which covers an LLC trading under its own legal name, does not need a separate statement. A statement is required when the business trades under a name that does not plainly show the true surname of each owner and is not already on file, and operating without a required statement is a Class 2 misdemeanor.

The filing itself is small and durable. The statement is filed electronically with the Secretary of State, or in paper form with any register of deeds in the state, at a fee of $10 with each new filing and each renewal, and the filing is renewed every fifth year. Keep the name consistent across the statement, the board shop license, the sales tax license and the bank account, because the shop license is not transferable and a name or ownership change belongs in a conversation with the board rather than a quiet rebrand.

Getting your EIN

The Employer Identification Number is the federal tax identity for the business, issued free by the IRS. A shop with employees needs one before the first payroll, because federal withholding, the state reemployment assistance account and new hire reporting all key off the business identity it anchors. Apply on the IRS site, keep the number with the LLC records, and use the same legal name on the EIN record, the Secretary of State filing, the sales tax license and the board shop license application so the files match.

Sales tax: barbering is named in the statute

South Dakota taxes services, and barbering is not swept in by implication: the sales tax statute at section 10-45-5 names barbers among the taxed businesses outright. The Department of Revenue tax fact for beauty salons and barber shops confirms that services provided by barbers are subject to state plus applicable municipal sales tax. The state rate is 4.2 percent, and municipalities add 1 to 2 percent where the service is received, so the register is programmed for the combined rate at the shop address. One date belongs in the pricing plan: the 4.2 percent rate is a temporary reduction, and the statute restores 4.5 percent on July 1, 2027.

The mechanics matter as much as the rate. The shop holds a sales tax license from the Department of Revenue, required of any business with a physical presence in the state, and the license is not transferable, so an ownership or entity change means a new license and a final return on the old one. The shop is the consumer of the products it uses in services, owing use tax on supplies bought without tax, while products sold to customers are taxable retail sales the shop may buy for resale with an exemption certificate. Voluntary tips are not taxed, mandatory tips are part of taxable gross receipts, gift certificates are taxed when redeemed rather than when sold, and business records must be kept at least three years.

Chair rent in a South Dakota barbershop

The barber chapter prices the shop and its chairs rather than licensing the renter, so chair rent in a barbershop works differently from booth rent across the hall in the cosmetology system, where the renter holds her own booth license. A barber renting a chair works inside the shop license the premises hold, in a shop that must remain under the direct supervision and management of a registered barber, and the board issues him no separate credential for the chair. What he must hold is his own barber certificate of registration, current, renewed every May 31 like every other barber in the state.

The independence of the arrangement is documented at the tax level instead. A renter who takes his own clients, sets his own prices and collects his own money is conducting his own business: the Department of Revenue framework treats each independent operator as responsible for a sales tax license and for remitting tax on his own receipts, while chair rent itself is not subject to sales tax. He also carries his own fictitious name statement if he trades under a shop name of his own. Whether an arrangement is genuinely a rental or is employment in substance still turns on the working facts, who controls the schedule, the prices and the book, and an owner who directs a barber like an employee should hire him as one and take on the payroll obligations in the next section.

Hiring barbers: wages, unemployment and reporting

South Dakota minimum wage is $11.85 an hour from January 1, 2026, adjusted annually under section 60-11-3.2, with a tipped cash wage of $5.925 an hour, exactly half the standard rate. Commission barbers are employees when the shop controls their schedules, prices and clients; the chair rent section explains how a genuine renter documents independence, through his own tax license and business filings rather than a board credential.

Hiring triggers two state registrations and one federal habit. The business registers with the Reemployment Assistance Tax Unit in the Department of Labor and Regulation and pays contributions on the first $15,000 of each employee wages per year, the taxable wage base in place since 2015 and confirmed for 2026. A new non-construction employer pays a 1.20 percent reemployment assistance tax plus a 0.55 percent investment fee in its first year, then 1.00 percent plus the same investment fee in years two and three, before experience rating takes over with rates from 0 to 9.5 percent. New hires are reported to the Department of Labor and Regulation within 20 days of the hire date. There is no state income tax withholding to run, and the EIN from the earlier section must be in hand before payroll starts.

The local layer: cities, zoning and premises

The state licenses the shop; the city decides where it can be. Zoning approval for a personal services use, any city business license your locality requires, building and signage permits, and occupancy inspections all run through the city or county where the premises sit, on the local calendar rather than the board calendar. The municipal sales tax is also a local fact: the 1 to 2 percent a city adds is set by the city where the service is received. Treat the local layer as a set of calls to make in the specific town before signing a lease.

Premises facts carry state licensing consequences as well. The shop license belongs to the shop it names and cannot be transferred, and the supervision condition runs continuously: a shop whose registered barber manager leaves is a shop out of compliance until another registered barber holds the role. Plan the management bench before opening day, because the board inspection that arrives every year will ask who is in charge, and the honest answer has to be a licensed name.

Insurance for a South Dakota barbershop

Nothing in chapter 36-14 conditions the barber or shop licenses on carrying liability insurance, so coverage is a business judgment rather than a licensing step, with one exception: workers compensation is an employment obligation for a shop with employees. The standard voluntary stack is general liability for the premises, professional liability for the services the barber license covers, and property coverage for chairs, tools and retail inventory. Owners using the chair rent model should require each renter to carry his own professional liability policy, because the renter is a separate business operating inside premises licensed in your name, and your policy alone is a thin answer to a claim arising from his chair.

What it costs to open a South Dakota barbershop

The state level costs of opening sit in published schedules. On the licensing side: the shop license at $250 plus $20 per chair for the first year, and the $225 initial barber license for each barber who does not already hold one, examination included. On the formation side: $150 to file the Articles of Organization online, $10 for the fictitious name statement if the shop trades under a name not already on file, and nothing for the EIN or the sales tax license application itself. Recurring state costs run on the calendar in the next section: the $200 per barber and $225 plus $20 per chair shop renewals every May 31 with the $150 inspection, the $55 LLC annual report, and the sales tax the register collects on every service ticket. Everything beyond the schedules is market cost, priced locally.

Renewal and filing calendar

The rhythm of a South Dakota barbershop year is a single cliff and a personal date: everything barber renews together on May 31, while the company report follows the month the business was formed.

Official sources

• Board of Barber Examiners: barber and barber shop licensing under chapter 36-14, the examination and shop applications, and the current fee figures.
• Department of Revenue, Beauty Salons and Barber Shops tax fact: sales tax on services by barbers, independent operators, products, tips and record keeping.
• Department of Revenue, sales and use tax: the 4.2 percent state rate, who needs a sales tax license, and the municipal tax layer.
• Secretary of State, filing fees: the $150 Articles of Organization fee online, the $55 annual report, the $55 late fee and the $10 fictitious name registration.
• Department of Labor and Regulation, minimum wage FAQ: the $11.85 rate from January 1, 2026 and the tipped cash wage.
• Department of Labor and Regulation, Reemployment Assistance tax FAQ: the $15,000 taxable wage base and the new employer rate table.
• IRS, apply for an EIN: the free federal application.

South Dakota barbershop FAQ