I just formed a single-member LLC in South Dakota (home base is Sioux Falls) and I sell handmade goods online through Etsy and my own Shopify site. Do I need to get a separate business license for online sales, or does the LLC formation cover me? I've seen conflicting info and don't want to miss something obvious.
Licensing
Does a South Dakota LLC need a separate business license for online sales?
Need more info, but generally: South Dakota doesn’t have a statewide general business license. Your LLC formation is not a license. Depending on what you sell, you might need sales tax license (if you have nexus) and possibly local permits. If it’s just handmade crafts sold online, often the main thing is sales tax registration once you cross the threshold. But check with a tax pro.
Also in SD. No blanket state business license. But if you sell taxable goods, you need a sales tax license through the Dept of Revenue. The LLC certificate is just for the entity. Online sales can create nexus in other states too so don’t ignore that.
What cordgrass said. I’d add that if you’re selling through Etsy, they may collect and remit sales tax for you in some states. But SD still wants their cut for in-state sales. The Department of Revenue website is actually pretty clear.
Not a lawyer etc, but I went through this last year. I have a SD LLC and sell online. No separate state business license. I did have to register for sales tax because I hit the economic nexus threshold. Also check if your city requires a business license for home-based businesses — Sioux Falls might have something.
Lol @ “LLC formation covers me.” It absolutely does not. That piiece of paper just says you exist. Licensing is a whole different animal.
Actually, on the city thing: Sioux Falls does require a business license for cer tain activities. Might be worth a call to the city licensing office. I think it’s more about brick-and-mortar or home occupation permits though.
I’m in a similar boat but in Rapid City. My accountant said no state business license, just sales tax if applicable. He also mentioned thatt if the LLC is taxed as a partnership or S-corp there may be other filings, but not a “license” per se.
This thread is making me realize I’ve been flying blind. I just assumed Etsy handled everything. Probably should look Into the SD sales tax license for my own state sales. Thanks for the reminder, OP.
One more thing—don’t forget about local zoning if you’re running from home. Not a license exactly, but could bite you. I had to get a conditional use permit for my garage-based operation. But that’s more for neighbors complaining about traffic
Honestly, the only people who can answer this 100% are a CPA or attorney familiar with SD. Everyone else is just repeating the same “no general license” line. Which is true, but that doesn’t mean it’s the whole story.