How to Get a Tax ID Number in South Dakota for a New Business

To get a tax ID number for a new South Dakota business, first determine which identification or registration your business actually needs. Most owners asking for a “tax ID” mean a federal Employer Identification Number (EIN), but a business that sells taxable products or services may also need a South Dakota sales tax license. Employer-related registration may apply separately.

An EIN is a federal tax ID issued free by the Internal Revenue Service. It does not replace a South Dakota tax license, and a state tax license does not replace an EIN. Because there is no single South Dakota state tax ID that applies to every new business, the right combination depends on the business’s entity type, workforce, sales activity, and presence in the state.

Identify the tax ID your South Dakota business needs

Start with the reason someone requested a tax ID. A bank, payroll provider, vendor, marketplace, or government agency may use the general phrase “tax ID” while referring to a specific account. Ask which number or registration is required rather than applying for every possible account.

An EIN is generally needed to hire employees, operate a partnership or corporation, pay sales or excise taxes, or administer certain trusts, retirement plans, and estates. Whether it is necessary depends on the entity and its tax activities. A sole proprietor’s needs can therefore differ from those of a corporation, partnership, or LLC with employees.

For a closer look at the federal application, see How to Apply for an EIN in South Dakota: New Business Guide.

How common South Dakota business scenarios differ

A newly formed LLC, partnership, or corporation

Complete the state formation before requesting the EIN. The IRS directs LLCs, partnerships, corporations, and tax-exempt organizations formed under state law to form through the state before applying online for an EIN. This order helps the federal application reflect the entity that was actually created.

After formation, evaluate whether the business will have employees, taxable sales, or another activity that calls for a separate state account. Entity formation alone does not identify every tax registration the business may need.

A seller with a South Dakota location or other physical presence

A business with physical presence in South Dakota must obtain a sales tax license. This state license is separate from its federal EIN. New sellers should also review broader business license requirements in South Dakota, because a tax registration does not by itself resolve every licensing question.

A remote seller without physical presence

A business without physical presence must obtain a South Dakota sales tax license if its South Dakota gross revenue exceeded $100,000 in the previous or current calendar year. The $100,000 threshold is specifically for businesses without physical presence; it should not be applied to decide whether a physically present business must register.

A remote seller should track South Dakota revenue separately and reconsider its registration position as its activity changes. Businesses seeking the applicable state account can review information about the South Dakota sales tax number.

A new or acquired business addressing workforce registration

The South Dakota Department of Labor and Regulation states that new and acquired businesses must register with its Reemployment Assistance Tax Unit. Most use Registration Form 1. Form 1NP applies to specified 501(c)(3) organizations, and Form 1PS applies to specified political subdivisions. Registration is available online or by form, and completed forms may be submitted by mail or fax.

This is a separate state workforce registration, not another name for the federal EIN. A business without employees should confirm how the registration instructions apply to its circumstances rather than assuming that an EIN completes the process.

Apply in the right order

1. Establish the business structure. Decide whether the operation will be a sole proprietorship or an entity formed under state law. If it is an LLC, partnership, corporation, or tax-exempt organization, complete state formation before using the IRS online EIN process.
2. Identify the responsible party. The EIN application asks for the person who ultimately owns or controls the entity or otherwise exercises effective control. Have consistent entity and responsible-party information available before beginning.
3. Choose an eligible EIN application method. The IRS online tool may be used when the principal place of business is in the United States or its territories, the applicant is the responsible party or an authorized representative, and the responsible party has an SSN or ITIN.
4. Submit one federal application. An approved online application receives an EIN immediately. The IRS allows only one EIN application per responsible party per day, and that daily limit applies across application methods.
5. Use an alternative when the online tool is unsuitable. Domestic applicants may submit Form SS-4 by fax or mail. Telephone applications are limited to international applicants. The IRS says to use only one application method for each entity, so do not send a duplicate Form SS-4 while another submission for the same entity is pending.
6. Complete applicable South Dakota registrations. Determine whether the business needs a sales tax license, Reemployment Assistance registration, or another activity-based account. Businesses may apply for a sales tax license through the South Dakota Department of Revenue’s online Tax License Application. The Department also identifies the Streamlined Registration System as an option for multistate registration.
7. Keep each confirmation with the correct business records. Label the EIN as federal and each South Dakota account by its purpose. This reduces the risk of entering a state license number where a federal EIN was requested.

If the business will buy goods for resale, the sales tax account may also affect how it documents exempt purchases. See How to Get a Resale Certificate in South Dakota for that separate issue.

Avoid mismatched or duplicate registrations

Many tax ID problems begin with inconsistent information rather than the absence of a number. Before filing, compare the business name, entity type, formation details, responsible-party information, and addresses across the relevant records. Do not casually switch between an owner’s name, a trade name, and the entity’s legal name when a form asks specifically for one of them.

Another common problem is treating all identification numbers as interchangeable. An EIN identifies the business for federal tax administration. A South Dakota sales tax license supports state sales-and-use-tax administration. Reemployment Assistance registration serves a workforce-tax purpose. Record each number with its issuing agency and intended use.

Avoid filing multiple EIN applications because a response is not visible or because a different submission method appears faster. The IRS directs applicants to use only one application method for an entity. Duplicate submissions can create uncertainty about which record belongs with the business.

Changes after registration also require attention. A change in ownership or legal organization requires a new South Dakota tax license, including specified changes involving sole proprietorships, partnerships, corporations, or mergers. This rule concerns South Dakota Department of Revenue tax licenses and should not automatically be treated as a rule about whether a new federal EIN is required.

Final decision checklist

• Have you identified whether the requested “tax ID” means an EIN, a South Dakota sales tax license, a workforce registration, or another specific account?
• If the business is an LLC, partnership, corporation, or tax-exempt organization, has its state formation been completed before the online EIN application?
• Does the business generally need an EIN because of employees, entity type, sales or excise taxes, or administration of a covered trust, plan, or estate?
• If using the online IRS tool, does the application meet the online eligibility conditions?
• Has only one EIN application method been selected for this entity?
• Does the business have physical presence in South Dakota?
• If it lacks physical presence, has South Dakota gross revenue exceeded $100,000 in the previous or current calendar year?
• Has the business reviewed Reemployment Assistance registration based on the state’s instructions for new and acquired businesses?
• Do the legal name, entity type, addresses, and responsible-party details match the underlying business records?
• Has an ownership or legal-organization change created a need for a new South Dakota tax license?

The practical goal is not to collect as many numbers as possible. It is to obtain the correct federal and state registrations for the business’s actual structure and activities, then keep each number tied to the agency and purpose for which it was issued.