Before you offer professional handyman services in South Dakota, it’s smart to know what you can lawfully do. This will keep you out of legal trouble, allowing you to earn money confidently.
I’ve pored over pages of complex legal jargon, spoken to state inspectors, and compiled the most critical information. Here’s what I’ve found.
Do you need a handyman license to offer services in South Dakota?
Not at the state level. In fact, South Dakota has no licensing requirement for general contractors, either. Handymen can tackle all sorts of homeowner requests, including:
- drywall repair and painting
- furniture assembly
- gutter cleaning
- cabinetry install and repair
- flooring install and repair
- deck repair
- tile work
In addition to these common projects, handymen can perform general construction in many jurisdictions, which is noteworthy, as few states allow building without satisfactory exam grades, work history, and approved applications.
With this said, cities, towns, and counties can impose their own requirements. Case in point: Sioux Falls orders contractors who take on jobs that require pulling a permit to obtain their Residential Building Contractor License. Examples of projects that need permits in Sioux Falls include:
- installing sheetrock
- installing exterior windows and doors
- finishing a basement
- performing roofing services
- building, remodeling, and expanding a home
- repairing and installing siding
- building decks and sheds
- installing fencing
Sioux Falls is just one example of a district that imposes license and permit requirements on handymen. It’s advisable to check with the City Hall in the area you plan to work to be clear on regulations in the region you’ll be working.
Are there any other requirements for handymen in South Dakota?
Yes. A Contractor’s Excise Tax License is required of all contractors “…engaging in services that include the construction, building, installation, or repair of a fixture to real property…”. Happily, there is no cost for the card. It allows for online filing and payment of taxes for construction projects. The license link can be found here.
Registering a DBA (Doing Business As) name is also required if you choose to attach a moniker to your business that doesn’t include your surname. For example, if Joe Smith names his business “Joe’s Handyman Services,” he’ll need to file a DBA. If he labels his business “Joe Smith’s Handyman Services,” however, he won’t need to file, as his last name is included in his business name. DBA filings are handled at the South Dakota Secretary of State’s office here.
Obtaining a Residential Building Contractor License
Using Sioux Falls as our example, acquiring a Residential Building Contractor license involves a grade of 80% on the Construction Supervisory Exam ($75), a completed application ($100-$300), a $20K bond with the city, and General Liability insurance of at least $300K. Information and links related to the Residential Building Contractor License in Sioux Falls can be found here.
Limitations for Handymen
Handymen in South Dakota are unable to engage in plumbing, electrical, HVAC, asbestos removal, and structural planning without the appropriate license in the respective field.
To get a better sense of any exemptions to the licensing rules, I reached out to inspectors on the state’s electrical and plumbing boards. While it was interesting to hear their individual take on regulations and exceptions, the conversations didn’t clarify the “gray areas” as I’d hoped. While one plumbing inspector indicated that replacing toilets, sinks, and fixtures was acceptable without a license, the other inspector I spoke with stated that no plumbing work was available to the handyman outside of his or her own home.
I had a similar experience with the two inspectors I reached out to regarding electrical work. One investigator claimed that swapping out ceiling fans, light fixtures, and switches was an acceptable project for unlicensed handymen, while the second investigator I contacted stressed that if the task involves “any connection of wiring,” only a licensed electrician can do the work. In an effort to get some clarity on the conflicting responses I received, I poked around the state’s website and came across a statute that seems to underscore the limitations on electrical work. Take a look and see if you agree.
Because of the vagaries in the responses I received, handymen should tread carefully when undertaking projects in these specialized fields.
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Advertising Restrictions
I was unable to locate details on advertising a handyman business in South Dakota; however, like most states, the Attorney General’s Office has a Consumer Protection agency that has laws in place to protect consumers from misleading or deceptive marketing.
For this reason, handymen should be cautious not to “oversell” themselves in their advertisements or on their websites, proposals, and invoices. If you’re not a licensed plumber, for example, don’t list plumbing services as something you offer. This will help you avoid enforcers.
Insurance Requirements
There are no insurance mandates for independent handymen in South Dakota. If the handyman chooses to hire employees, however, the math changes.
If a handyman has others working under him, he’ll need to pay Re-employment Assistance Tax–South Dakota’s alternative to unemployment insurance.
Workers’ Compensation insurance isn’t required, even for handymen who have employees; however, it’s highly recommended. If an employer opts out of Workers’ Comp, the state allows employees to file a civil lawsuit against their employer. This isn’t a situation any business owner wants to find themselves in. Err on the side of caution and consult with a trusted advisor regarding the cost/benefit of this coverage.
Finally, while handymen aren’t obligated to carry liability insurance, it’s a wise choice. Just one serious claim can bankrupt your business and personal finances.
Insurance is low-cost if you get it here.
Penalties for Contracting Illegally in South Dakota
South Dakota is serious about curbing illegal contracting, especially in trades that require specialty licensing.
Engaging in trade work without proper licensing is a Class 2 misdemeanor in South Dakota, punishable by up to 30 days in jail and/or a fine of up to $500.
Similarly, working without a Contractor’s Excise Tax license is labeled a Class 1 misdemeanor, which can cost you $1K in fines and/or a year in prison. If a handyman continues to operate a business after receiving a notification from the state’s Department of Revenue, he could be found guilty of a Class VI felony, resulting in a fine of up to $4K and/or two years in the state penitentiary.
Be smart—keep plumbing, electrical, and other license-only work within the framework that’s allowed. The penalties aren’t worth it.
Conclusion
South Dakota offers real opportunities for handymen with the drive to work with their hands and solve problems. With a few simple steps — obtaining a Contractor’s Excise Tax card, for one — handymen can begin working.
The state also offers a wide range of options for handymen regarding the types of projects they can take on; in many regions, even general construction is available to them without a license. However, different jurisdictions in the state have different laws. To stay legal while turning a profit, check with City Hall in the area you’ll be working to be sure you have the certification needed to perform the type of handyman projects you aim to do.
As long as South Dakota handymen remain mindful of restrictions on licensed trade work and take the steps to get the proper credentials in the jurisdictions where needed, income-generating projects are available to them.
Do you offer handyman services in South Dakota?
If so, I’d love to hear about your experience. Please leave a comment below to share any insights I may have missed.
