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Last updated: General South Dakota contractor bond information — confirm current requirements with the licensing authority.

South Dakota Contractor Bond— Electrical, Excise Tax & Sioux Falls

South Dakota takes a unique approach to contractor regulation -- there is no state-level general contractor license. Instead, bonding requirements come from trade-specific state boards and municipal governments. Electrical contractors must post a $10,000 bond under SDCL 36-16, and the SD Department of Revenue may require an excise tax bond under SDCL 10-46B-11. Sioux Falls, the state's largest city, requires bonds ranging from $10,000 to $20,000 depending on contractor type. South Dakota businesses that also need a South Dakota auto dealer bond can bundle both applications. Contractors expanding into neighboring states should also review the Nebraska contractor bond requirements.

No payment until your bond is issued · No obligation. We walk you through the notarization step your SD electrical bond requires.

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Quick answer
South Dakota requires a $10,000 bond for electrical contractors, and Sioux Falls adds its own. Where a bond is required, you pay a premium that is a small percentage of the bond amount, not the full amount (any cost here is an estimate; the surety sets the final price).
  • Who requires it: South Dakota State Electrical Commission (SDCL 36-16).
  • Amount: $10,000 for electrical contractors; Sioux Falls requires $10,000 to $20,000.
  • Typical cost (estimate): about $100–$500 per year for the $10,000 electrical bond, depending on credit. The surety sets the final price.
  • Timing: We submit complete applications to the carrier promptly; most quotes within one business day.
Get a South Dakota contractor bond quote
$10,000
Electrical Bond
$100+
Starting Cost
2%
Excise Tax Rate
Quick
Review

Official South Dakota Requirements

"Each applicant for an electrical contractor license shall furnish a surety bond in the penal sum of ten thousand dollars conditioned upon the faithful performance of all electrical work."
SD State Electrical Commission (SDCL 36-16) • South Dakota Codified Law 36-16

Every Bond Type SD Contractors May Need

State electrical, excise tax, and Sioux Falls municipal bonds

What the SD State Electrical Commission Requires

$10,000 bond required under SDCL 36-16

Electrical License Requirements
SD State Electrical Commission requirements
SD State Electrical Commission license required for all electrical work
$10,000 surety bond per SDCL 36-16, must be notarized
Pass state electrical examination
Proof of liability insurance
Workers' compensation coverage for employees
Bond must remain active for full license term
Sioux Falls Municipal Requirements
South Dakota's largest city contractor bonds
Residential building contractors: $20,000 surety bond + $300,000 general liability + Construction Supervisor Exam
All other contractors: $10,000 surety bond
Right-of-Way contractors: $10,000 project-specific bond
City of Sioux Falls business license required
Pass applicable trade examinations
Proof of insurance per city ordinance

Contractor's Excise Tax Bond (SDCL 10-46B-11)

South Dakota is one of the few states that imposes a 2% excise tax on gross receipts from all construction services instead of a traditional sales tax on materials. Under SDCL 10-46B-11, the SD Department of Revenue may require contractors to post a surety bond guaranteeing payment of excise taxes. This bond is typically required for contractors who are new to South Dakota, have a history of delinquent tax payments, or when the department determines a bond is necessary to protect state revenue.

Tax Rate
2%
On gross construction receipts
Bond Amount
Variable
Based on estimated tax liability
Authority
SD DOR
dor.sd.gov

Sioux Falls Municipal Bonding Obligations

SD's primary municipal market with the most detailed bonding requirements

Residential Building
$20,000
Highest bond requirement

$20,000 surety bond

$300,000 general liability insurance

Construction Supervisor Exam required

City business license

All Other Contractors
$10,000
Standard municipal bond

$10,000 surety bond

Applicable trade license

Insurance per city ordinance

City business license

Right-of-Way
$10,000
Project-specific bond

$10,000 per project bond

Required for ROW excavation/work

Guarantees restoration of public ROW

City permit required

What You Will Actually Pay for an SD Electrical Bond

Annual premium for the $10,000 electrical contractor bond

Need a South Dakota Contractor Bond?

Whether you need an electrical bond, excise tax bond, or Sioux Falls municipal bond, get a quote within one business day with premiums often about $100/year.

Five Steps to Your SD Contractor Bond

Step-by-step process for SD contractor bonds

1

Identify Your Bond Requirement

Determine which bonds you need: state electrical bond (SDCL 36-16), excise tax bond (SDCL 10-46B-11), or municipal bond (e.g., Sioux Falls). Electrical contractors working in Sioux Falls may need both the state electrical bond and a municipal bond.

2

Apply for Your Bond

Complete our online application with your business details, credit information, and desired bond type. Most applicants receive a fast quote for the $10,000 electrical bond.

3

Bond Issuance and Notarization

Once approved, your bond is issued by a Treasury-listed surety carrier. For SD electrical bonds, the bond must be notarized before submission to the State Electrical Commission.

4

File with the Appropriate Authority

Submit your notarized bond to the SD State Electrical Commission, SD Department of Revenue, or your municipality. Filing requirements vary by bond type.

5

Maintain Your Bond

Keep your bond active for the full license term. Bond cancellation will result in license suspension. Renew annually to maintain continuous coverage.

Video Guide

Watch: South Dakota Contractor License Bond — Non-Resident Excise Tax Bond

South Dakota has no statewide contractor bond for residents — but non-resident contractors must post an excise tax bond with the Dept. of Revenue for the 2% gross receipts tax. Here's how it works and what Sioux Falls and Rapid City require locally.

Key moments in this video
  • 0:00Does South Dakota require a contractor license bond?
  • 0:45Bond amount & how it's determined
  • 1:30What you actually pay (cost by credit tier)
  • 3:00Bond vs. insurance — why you need both
Watch on YouTube

Licensed? The bonds you'll need to win jobs in South Dakota

Your license bond gets you licensed. Bigger jobs, public work and most commercial contracts add contract bonds. We place license and contract bonds, so you can keep one agency as your work grows.

Bid bonds →

Most public bids, and many private ones, require a bid bond (often 5% to 10% of the bid) with your proposal.

Performance bonds →

Once you win, the owner usually requires a performance bond guaranteeing the job gets finished in South Dakota.

Payment bonds →

Guarantees your subcontractors and suppliers get paid. Usually required alongside the performance bond on public work.

Performance & payment bonds →

Most public contracts ask for both bonds together, each commonly at 100% of the contract price.

Answers to Common SD Contractor Bond Questions

Common South Dakota contractor bond questions

Does South Dakota require a state contractor license?
South Dakota does not have a state-level general contractor license. However, electrical contractors must be licensed through the SD State Electrical Commission under SDCL 36-16, which includes a mandatory $10,000 surety bond. Plumbing contractors are licensed by the SD Plumbing Commission. General contractors working in municipalities like Sioux Falls must obtain local licenses and bonds. This makes South Dakota unique -- bonding requirements come from both state trade-specific boards and municipal governments rather than a single state licensing authority.
What is the South Dakota contractor excise tax bond?
South Dakota imposes a 2% excise tax on gross receipts from all construction services under SDCL 10-46B. The SD Department of Revenue may require a contractor's excise tax bond under SDCL 10-46B-11 when a contractor is new to the state, has a history of delinquent tax payments, or the department determines a bond is necessary to secure tax collections. The bond amount varies based on estimated tax liability. This bond guarantees the contractor will remit the 2% excise tax to the state. It is separate from any trade license bond or municipal bond requirement.
How much does a South Dakota electrical contractor bond cost?
The $10,000 SD electrical contractor bond typically costs $100-$500 per year depending on your credit score. With excellent credit (750+), expect $100-$150 annually (1-1.5% of the bond amount). Good credit (680-749) costs $150-$300. Fair credit ranges $300-$500. Poor credit applicants may pay up to $1,000. The bond must be notarized before submission to the SD State Electrical Commission. For a deeper look at how bond pricing works, see our surety bond cost guide at /surety-bond-cost/.
What bonds do I need to work as a contractor in Sioux Falls?
Sioux Falls is the largest city in South Dakota and has the most comprehensive municipal contractor bonding requirements. Residential building contractors need a $20,000 surety bond, $300,000 in general liability insurance, and must pass the Construction Supervisor Exam. All other contractor types need a $10,000 surety bond. Right-of-Way contractors need a separate $10,000 project-specific bond. You must also obtain a Sioux Falls business license. If you are an electrical contractor, you still need the separate $10,000 state electrical bond through the SD State Electrical Commission in addition to any Sioux Falls municipal bond.
Does the SD electrical contractor bond need to be notarized?
Yes. Under SDCL 36-16, the $10,000 electrical contractor bond submitted to the SD State Electrical Commission must be notarized. This is a specific requirement of the South Dakota electrical licensing process. The bond form is signed by both the contractor (principal) and the surety company, and a notary public must witness and notarize the signatures before the bond is submitted. Our bonding process includes notarization assistance to ensure your bond meets all SD State Electrical Commission filing requirements.
How does South Dakota's 2% excise tax on construction work?
South Dakota levies a 2% contractor's excise tax on the gross receipts of all construction services performed within the state under SDCL 10-46B. This applies to new construction, remodeling, and repair work. The prime contractor is responsible for collecting and remitting the tax to the SD Department of Revenue. Unlike most states that use sales tax on materials, South Dakota taxes the total construction contract value. If the Department of Revenue determines a contractor poses a collection risk, they may require a surety bond under SDCL 10-46B-11 to guarantee tax payment.
What is the difference between a surety bond and insurance for SD contractors?
A surety bond protects the public and the state -- if a claim is paid, the contractor must reimburse the surety. Insurance protects the contractor from their own losses. South Dakota electrical contractors need both: the $10,000 surety bond under SDCL 36-16 plus liability insurance. The bond guarantees faithful performance of electrical work, while insurance covers property damage and bodily injury claims. See our detailed comparison at /bond-vs-insurance/.
Can I get a South Dakota contractor bond without a credit check?
Most surety bonds require a credit check because your credit score is the primary factor in determining your premium rate. However, we work with specialized surety carriers who approve applicants across all credit ranges. For the $10,000 SD electrical bond, even applicants with poor credit (below 600) can be approved at rates of 5-10% ($500-$1,000/year). The process is fast -- most applicants receive a quote within one business day. Start with our free quote at /how-to-get-a-surety-bond/ to see your options.
Who needs a South Dakota contractor bond?
South Dakota electrical contractors. It is required by the South Dakota State Electrical Commission (SDCL 36-16). The bond amount is $10,000 for electrical contractors; Sioux Falls requires $10,000 to $20,000.
How do I get a South Dakota contractor bond?
Request a quote with the form on this page. A licensed agent submits your application to a Treasury-listed surety carrier; once the carrier issues your bond, file it as the requiring agency directs.
What happens after I apply?
We submit complete applications to the carrier promptly; most quotes come back within one business day. The carrier decides approval and the final premium, and you pay only when your bond is issued.

Official South Dakota Resources

SD State Electrical Commission

Phone: (605) 773-3573

Website: https://dlr.sd.gov/electrical/

Statute: SDCL 36-16

View Electrical Statute
SD Department of Revenue

Phone: (605) 773-3311

Website: https://dor.sd.gov/

Excise Tax: SDCL 10-46B (2% on gross construction receipts)

View Excise Tax Statute

Explore More South Dakota Bond Resources

Neighboring States

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Other South Dakota Bonds

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Tools & Guides

Contractor bond calculatorSurety bond cost guide50-state requirements guideGeneral contractor bond guideGet your free quoteHow to get a surety bondBond vs. insurance explained

Quick Links

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Eric Drummond, Licensed Surety Producer
Reviewed by
Eric Drummond, Licensed Surety Producer
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