Opening a Convenience Store in South Dakota: Licenses & Permits

South Dakota makes beer and wine straightforward, with no quota, while liquor licenses are capped by city population. Its biggest change is coming on January 1, 2027, when a new Retail Nicotine License starts and every nicotine product moves behind the counter. Below is who issues what, and how each rule shapes the store you design.

Licenses and permits at a glance

Fuel tanks: DANR

The Department of Agriculture and Natural Resources (DANR) Storage Tank Section regulates tanks under ARSD chapter 74:56:01:

• Plans first: submit plans and specifications at least 30 days before installing or upgrading. Work can't start without DANR approval, which normally comes within 30 days.
• Notification: file DANR's form within 30 days after installation, and report changes, including ownership, within 30 days.
• Construction: all new tanks and piping installed after October 13, 2018 need secondary containment with interstitial monitoring, and piping needs under-dispenser sumps.
• Operators: Class A, B and C operators must be designated and trained. Missing training can bring penalties of at least $500 per tank and a ban on fuel deliveries.
• Fund: the Petroleum Release Compensation Fund pays up to $1 million per occurrence after a $10,000 deductible, with no pre-registration.

Alcohol: city and county licenses

Inside city limits the city governing body issues licenses, and outside them the county, with Department of Revenue approval. A hearing and published notice come first.

• Beer and South Dakota wine: a malt beverage and farm wine license, $300, covering on- and off-sale, with no quota.
• All wine and cider: a wine and cider retailer license, $500, with no quota in statute.
• Liquor: a package off-sale liquor license, at least $300. It's capped at three licenses for a city of 1,000 or fewer, plus one for each additional 1,500 people. County licenses can't be within 3 miles of a city.
• Hours: no sales from 2 a.m. to 7 a.m. Cities and counties may restrict Sunday and holiday sales.
• Staff: clerks 18 or older may sell if alcohol is under 50% of gross sales or someone 21 or older is on site.
• Fines: a sale to a minor brings a $500 fine for a trained clerk and $1,000 for an untrained one, with suspension on a third violation in 24 months.
• One premises, several licenses: suspending one license suspends all of them, including video lottery.

Tobacco and nicotine

• Now: sales are 21 and older, with a required age sign, and no self-service display of cigarettes, smokeless tobacco or vapes outside tobacco specialty stores.
• From January 1, 2027: each location needs a Retail Nicotine License from the Department of Revenue: $300 if nicotine is at least half of income, $200 otherwise, and $100 per vending machine. Applications open around November 1, 2026, and selling without one costs $500 a day.
• New rules in 2027: no self-service display of any nicotine product, an age sign with letters at least 1 inch tall with the license next to it, and no phone, online or curbside-pickup sales.
• Suppliers: since July 1, 2026, retailers may buy only from licensed distributors.

Food service: the Department of Health

The Department of Health's Office of Health Protection licenses food service, including convenience stores. Submit a floor plan 30 days before construction; over 4,000 sq ft it must be stamped by an engineer or architect. A Certified Food Service Manager is required before the inspection. Fees are a one-time $100 plus an annual $90 with no seats or $120 for up to 50 seats.

Sales tax, fuel pumps and lottery

• Sales tax: a Department of Revenue license is free. The state rate is 4.2%, scheduled to return to 4.5% on July 1, 2027.
• Fuel pumps: the Department of Public Safety's Office of Weights and Measures tests pumps every two years, at $14 per standard meter.
• Lottery: the South Dakota Lottery charges a $1,200 application fee plus an FBI fingerprint check and pays a 5% commission. Retailers sell both scratch and lotto games. Video lottery needs an on-sale alcohol license and a 21-and-older area, so an off-sale-only store can't have machines.

What this means for your store design

• Plan a back-bar for every nicotine product by 2027, with the age sign and license together at the register.
• Plan beer and wine as the default alcohol section. Liquor depends on a quota license. See the cooler wall planner and beer cave cost.
• Check liquor quotas when choosing a site, and remember county licenses can't be within 3 miles of a city. See choosing a location.
• Plan a separate 21-and-older area if you want video lottery, which also requires an on-sale license.
• Submit food plans 30 days ahead, stamped if the store is over 4,000 sq ft. See food service build-outs.

Local approvals

Your city or county also controls zoning, building permits, fire inspections, signs and the alcohol licenses. Our construction checklist covers the local steps.

For South Dakota store design, see convenience store design in South Dakota and walk-in cooler services in South Dakota.

Sources

• ARSD chapter 74:56:01; DANR, storage tanks, plans and specifications, tank operator training and Petroleum Release Compensation Fund; SDCL 34A-13-20.
• SDCL 35-2-1.2, 35-2-3, 35-2-5, 35-2-10.1, 35-4-2, 35-4-10, 35-4-11.1, 35-4-79 and 35-4-81.2; Department of Revenue, liquor licenses and alcohol laws.
• SDCL 34-46-2, 34-46-2.2, 34-46-21 and 10-50E; Department of Revenue, cigarette, tobacco and nicotine products and nicotine product FAQ (June 2026).
• SDCL 34-18-10.4, 34-18-11 and 34-18-23; Department of Health, food service licensure and construction requirements.
• SDCL 10-45-2 and 37-21-9.1; Department of Revenue, sales and use tax; Office of Weights and Measures.
• South Dakota Lottery, become a retailer.

This page summarizes official sources as of October 2026. It is not legal advice. Fees and rules change, so confirm each one with the agency before you apply.