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Sales tax on labor in South Dakota: taxed on repairs to things, building repairs and new construction; installation depends on the job
In South Dakota, labor is taxed on repairs to things, building repairs and new construction; for installation it depends on the job. Read from South Dakota's own revenue pages, checked November 6, 2026, with every answer quoted below.
The tax in South Dakota
How the tax works in South Dakota: South Dakota taxes services in general unless a law exempts them. Work on buildings (construction services) is exempt from sales tax but is instead taxed by a separate 2% contractor's excise tax on the prime contractor's gross receipts.
Repairing a thing in South Dakota
Taxed. All repair of things (appliances like refrigerators and dishwashers) is subject to sales tax, labor included. You need a sales tax license.
- “Any service as defined by § 10-45-4.1 shall be taxable, unless the service is specifically exempt from the provisions of this chapter.” — SDCL 10-45-4 Tax on receipts from business services, no date on the page
- “All charges for repair services, including maintenance agreements, are subject to sales tax.” — ARSD 64:06:02:58 Repair services, no date on the page
- “Repair of items such as central air conditioning equipment, sprinkler systems, and elevators are realty improvements and receipts from such repairs are subject to the contractors' excise tax. Receipts from repairs of household appliances such as refrigerators, dishwashers, and dryers are not subject to the contractors' excise tax but are subject to the tax imposed by SDCL 10-45-4 and 10-45-5.2.” — ARSD 64:07:01:06 Real property repairs, page date: effective July 1, 1995
Repairing a home or building in South Dakota
Taxed. Not sales tax: repairs to the building and its fixtures (central air, sprinkler systems, elevators) are realty improvements taxed by the 2% contractor's excise tax on your gross receipts. The prime contractor owes it; it may be collected from the customer (the receipts include the tax collected from the consumer). Subcontractors with a prime contractor's exemption certificate don't owe it.
- “construction services (division C) except industry no. 1752 and locksmiths and locksmith shops” — SDCL 10-45-12.1 Services specifically exempt from tax, page date: SL 2004
- “Repair of items such as central air conditioning equipment, sprinkler systems, and elevators are realty improvements and receipts from such repairs are subject to the contractors' excise tax. Receipts from repairs of household appliances such as refrigerators, dishwashers, and dryers are not subject to the contractors' excise tax but are subject to the tax imposed by SDCL 10-45-4 and 10-45-5.2.” — ARSD 64:07:01:06 Real property repairs, page date: effective July 1, 1995
- “Any person entering into a contract for construction services ... or engaging in services that include the construction, building, installation, or repair of a fixture to real property must have a South Dakota contractor's tax license. The excise tax imposed on the gross receipts for construction projects is at a rate of 2%.” — Contractor's Excise Tax (SD Department of Revenue), no date on the page
- “The gross receipts would include the tax collected from the consumer.” — Contractor's Excise Tax (SD Department of Revenue), no date on the page
Installation work in South Dakota
It depends. Installing something that becomes a fixture of the building: 2% contractor's excise tax, not sales tax. Installing something that is not a fixture: sales tax. Most floor covering installation is sales tax (flooring is the exception to the construction rule). What it turns on: whether the item becomes a fixture to real property.
- “To determine whether excise tax or sales tax applies, it must first be determined whether or not the dental chair is a fixture. If it is a fixture, it is subject to the contractor's excise tax; if not, it is sales taxable.” — ARSD 64:07 (example under listed services), no date on the page
- “Any person entering into a contract for construction services ... or engaging in services that include the construction, building, installation, or repair of a fixture to real property must have a South Dakota contractor's tax license. The excise tax imposed on the gross receipts for construction projects is at a rate of 2%.” — Contractor's Excise Tax (SD Department of Revenue), no date on the page
- “Most floor covering sales and installations are subject to sales or use tax, not contractor's excise tax.” — Contractor's Excise Tax (SD Department of Revenue) FAQ, no date on the page
New construction in South Dakota
Taxed. Not sales tax: new construction and remodeling are taxed by the 2% contractor's excise tax on the prime contractor's gross receipts. You also owe sales or use tax on materials you supply.
- “construction services (division C) except industry no. 1752 and locksmiths and locksmith shops” — SDCL 10-45-12.1 Services specifically exempt from tax, page date: SL 2004
- “Any person entering into a contract for construction services ... or engaging in services that include the construction, building, installation, or repair of a fixture to real property must have a South Dakota contractor's tax license. The excise tax imposed on the gross receipts for construction projects is at a rate of 2%.” — Contractor's Excise Tax (SD Department of Revenue), no date on the page
- “The gross receipts would include the tax collected from the consumer.” — Contractor's Excise Tax (SD Department of Revenue), no date on the page
Listing labor separately on the bill in South Dakota
Not checked here. No quote shown here rules on listing labor separately in South Dakota.
- “All charges for repair services, including maintenance agreements, are subject to sales tax.” — ARSD 64:06:02:58 Repair services, no date on the page
Materials on jobs in South Dakota
Prime contractors owe sales or use tax on materials they or their subcontractors furnish if tax was not already paid; subcontractors owe sales or use tax on materials they furnish.
- “Owe state, plus applicable municipal use tax on material they, or their subcontractor, furnish for the contract if sales or use tax was not previously paid.” — Contractor's Excise Tax (SD Department of Revenue), no date on the page
Trade services South Dakota taxes
The services South Dakota's own pages name as taxed, each in the page's words:
- Janitorial: “Gross receipts from engaging in the business of furnishing janitorial supplies or services are subject to sales tax.”
- Furniture, heating, cooling systems, walls, ceilings, plumbing and windows): “Gross receipts from the business of furnishing specialty cleaning services are subject to sales tax. ... Examples include but are not limited to cleaners of: furniture, floor coverings, heating and cooling systems, walls, ceilings, plumbing and windows, and all other cleaning services to real or personal property.”
- “The gross receipts of an exterminator are subject to sales tax unless performed for an exempt entity.”
- Sodding: “The laying of sod or the planting of seeds is subject to sales tax. If sodding or seeding is done in conjunction with earth moving or landscaping, it is subject to the contractor's excise tax.”
- “All charges for repair services, including maintenance agreements, are subject to sales tax.”
- Floor laying: “construction services (division C) except industry no. 1752 and locksmiths and locksmith shops”
Where South Dakota's list of services comes from
- “Any service as defined by § 10-45-4.1 shall be taxable, unless the service is specifically exempt from the provisions of this chapter.” — SDCL 10-45-4 Tax on receipts from business services, no date on the page
- “construction services (division C) except industry no. 1752 and locksmiths and locksmith shops” — SDCL 10-45-12.1 Services specifically exempt from tax, page date: SL 2004
- “Gross receipts from the business of furnishing specialty cleaning services are subject to sales tax.” — ARSD 64:06:02:40, :76, :31, :32.01, no date on the page
What was not checked for South Dakota
- South Dakota's PDF guides to the contractor's excise tax and to landscaping could not be read; its statutes, rules and Department of Revenue web page were used instead. Lawn mowing, general lawn care and snow removal were not confirmed, only sodding and seeding.
Check with the South Dakota Department of Revenue
Before you bill: check with the South Dakota Department of Revenue. As of November 6, 2026.
This is a plain-words summary of each state's own revenue guidance as of November 6, 2026, not tax advice. Rules have exceptions, and cities and counties can add taxes of their own. Check with the state's tax department, linked on every state's page, before you bill.
Compare South Dakota with every state's answer, or with its neighbours just below.
Next door to South Dakota
Official sources for South Dakota
- SDCL 10-45-4 Tax on receipts from business services — no date shown
- SDCL 10-45-12.1 Services specifically exempt from tax — SL 2004
- ARSD 64:06:02:40, :76, :31, :32.01 — no date shown
- ARSD 64:07 (example under listed services) — no date shown
- Contractor's Excise Tax (SD Department of Revenue) FAQ — no date shown
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