Sales tax for South Dakota salons and barbers
How does sales tax work for a salon or barber shop in South Dakota?
Services at the chair are all taxed
Every service at the chair is taxable. Work by barbers, cosmetologists, nail technicians and estheticians is subject to state plus applicable municipal sales tax, and so is the wider list of salon services: permanent makeup, tattooing, tanning, ear candling, massage therapy, reflexology, aromatherapy, piercing and branding.
Personal care services are taxed at the location the service is performed, which for a salon is the chair. A 4.2% state rate plus a 2% city rate on a $45 haircut adds $2.79 to the ticket.
The tax sits on gross receipts, and wages or commissions paid to employees cannot be deducted from them. What the owner collects is what the return reports.
4.2% + municipalSouth Dakota taxes services by barbers, cosmetologists, nail technicians and estheticians at state plus municipal rates, alongside tanning, massage therapy, piercing and other salon services. — South Dakota Department of Revenue, retrieved 2026-09-29
A South Dakota salon owner may not deduct wages or commissions paid to employees from gross receipts subject to sales tax. — South Dakota Department of Revenue, retrieved 2026-09-29
Employees, owners and who owes the tax
Who owes turns on who collects. With employees, the salon owner holds the sales tax license and reports all the business's receipts, paying staff wages or commissions that carry no sales tax of their own.
With booth renters, each independent contractor who rents a chair needs their own sales tax license and remits the tax on their own receipts. Booth rent itself is not subject to sales or use tax, and a booth renter cannot deduct the rent from their taxable gross receipts.
If the owner collects all receipts, the owner remits on all of them. If the salon only provides space and the provider collects their own, the provider is licensed and remits. That is the whole split, and it decides how many licenses the building holds.
A South Dakota salon owner with employees holds the sales tax license and reports all receipts, while each booth renter holds their own license and remits on their own receipts. — South Dakota Department of Revenue, retrieved 2026-09-29
Booth rent in South Dakota is not subject to sales or use tax, and a booth renter cannot deduct the booth rent payment from gross receipts subject to sales tax. — South Dakota Department of Revenue, retrieved 2026-09-29
Products you use, products you sell
You are the consumer of the products you use in providing the service. Use tax is due on supplies taken from inventory that were bought without tax, at the same rate as sales tax, and sales or use tax is due on the equipment too.
Products you sell to customers are the other lane. Those are bought for resale on an exemption certificate, taxed when sold, with no use tax along the way.
Tell the supplier which is which at purchase. Delivery and handling charges, including postage, are part of the purchase price subject to sales or use tax, which lands the shipping on a supply order too. The collecting guide covers the certificate mechanics behind both lanes.
A South Dakota service provider is the consumer of products used in performing the service and owes use tax on supplies taken from inventory that were bought without tax. — South Dakota Department of Revenue, retrieved 2026-09-29
South Dakota salon delivery and handling charges, including postage, are included in the cost of the product subject to sales or use tax. — South Dakota Department of Revenue, retrieved 2026-09-29
The boards behind the license
The tax license is not the trade license. The Department points salons, cosmetologists, nail technicians and estheticians to the Cosmetology Board, massage therapists to the Board of Massage Therapists, and barbers to the Board of Barbers.
Both licenses cost the tax side nothing. The sales tax license has no fee, and it is due before the first customer, not after the tax board clears you.
Trades with a board on one side and the Department on the other are the norm on this site. A cleaning business holds the same split, and the cleaning page covers its version, where the customers can be exempt entities as well.
South Dakota directs salons to the Cosmetology Board, massage therapists to the Board of Massage Therapists and barbers to the Board of Barbers for occupational licensing. — South Dakota Department of Revenue, retrieved 2026-09-29
$0There is no fee for a South Dakota sales tax license. — South Dakota Department of Revenue, retrieved 2026-09-29
The month a salon files
The return covers every service on the books, from haircuts to spray tans, at 4.2% plus the city's rate, reported where performed. The Department's salon guidance lists the licensed trades at the chair and the add-on services beside them, so an unusual service is not automatically an untaxed one.
File every period even in a month of renovations, and keep the exemption certificates from any product resales for three years. The filing guide covers the due dates and the late penalty, and the first-return checklist orders the first month.
If the salon sits in a growing business with more than one chair town, remember a license is needed for each location, with consolidated statewide filing available to eligible identical-ownership businesses. The license guide covers that option.
| Arrangement | Who licenses | What is taxed |
|---|---|---|
| Owner with employees | The owner | All receipts of the business, at 4.2% plus municipal |
| Booth renter | The renter | The renter's own service receipts |
| Booth rent itself | Neither | Not subject to sales or use tax |
| Products used on clients | The provider, as consumer | Use tax on supplies bought without tax |
| Products resold to customers | The buyer, on the resale | Sales tax when sold to the customer |
A South Dakota business must file a tax return each reporting period even if it did not conduct business or receive income. — South Dakota Department of Revenue, retrieved 2026-09-29
Questions
Is the booth rent I pay deductible from my taxable receipts?
No. Booth rent is not subject to sales or use tax, but a booth renter cannot deduct the booth rent payment from gross receipts that are subject to sales tax. The rent is a cost, not a deduction.
Do I charge tax on a product I sell at retail, like shampoo?
Yes. Products bought for resale carry no use tax along the way and are taxed when sold to the customer, at 4.2% plus the municipal rate. Buy them on an exemption certificate and keep the certificate on file.
What about a spray tan or a massage I add to the menu?
Both are on the Department's taxable list for salons. Tanning services, whether spray tans or tanning beds, and massage therapy are subject to sales tax alongside the licensed chair work.
My chair is in a shop with no city tax. What do I charge?
The 4.2% state rate applies, and personal care services are taxed where performed, which is the chair's city. If the city imposes no municipal tax, no municipal rate is added to that work.