South Dakota Vending Machine Permits and Licenses

Vending permits and licenses by state · South Dakota

We found no state license for vending machines in South Dakota. Most operators need one thing from the state: a free sales tax license from the Department of Revenue, and one license covers every machine you run. South Dakota has no general sales tax exemption for food, so snacks, candy and soda from a machine are taxed at the full state and city rate. The Department of Health licenses places that prepare food, and we found no license for a machine stocked only with sealed snacks and drinks. Below is each requirement and the law it comes from.

South Dakota vending requirements at a glance

FreeSales tax license

4.2%State sales tax

7.2%Max combined sales tax

4.5%State rate set for July 1, 2027

Required

Sales tax license

Free from the Department of Revenue. One license covers all your machines.

See details →

Recommended

Resale certificate

Buy inventory tax-free with Form 2040, the Streamlined Certificate of Exemption. You collect the tax when it sells.

See details →

Applies

Tax on vending food

Snacks, candy and soda pay the full state and city rate. Hot food and coffee can add 1%.

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Depends

Food license

None found for sealed snacks and drinks. Food you prepare yourself needs a Department of Health license.

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Not required

Trading card license

Pokémon cards need only the sales tax license.

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Not required

Mystery products

No special license. They are taxable merchandise, covered by your sales tax license.

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Applies

Claw and crane machines

No decal, but receipts pay state and city sales tax.

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Varies

Local permits

Cities can issue vending machine licenses and set zoning rules.

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Last reviewed: October 28, 2026  ·  Sources: South Dakota Codified Laws, Administrative Rules of South Dakota, South Dakota Department of Revenue, South Dakota Department of Health, South Dakota Secretary of State, federal regulations (full list at the bottom)  ·  General information, not legal advice.

• Requirements and laws
• Do you need a license?
• Sales tax
• Food and drinks
• Cards, mystery and toys
• Federal rules
• Business setup
• FAQ
• Sources

South Dakota requirements and the laws behind them

Do you need a license to run a vending machine in South Dakota?

Not a vending license. We found no South Dakota license for machines that sell snacks, drinks, trading cards or toys. The Department of Revenue's rule on vending machines asks for one thing: "An operator of vending machines must obtain a sales tax license" (ARSD 64:06:03:41). Outside nicotine products and travel insurance machines, we found no vending license in state law.

If your machines sell anything, the one state license you need is the sales tax license. A Department of Health license comes in when you prepare food yourself. Cities can issue their own vending machine licenses and set zoning rules, so check with the city where each machine will sit before you install it.

Sales tax on vending sales in South Dakota

The sales tax license

Any business with a physical presence in South Dakota must hold a sales tax license (Department of Revenue). The Department's Bars and Restaurants tax fact (July 2026) says owners who place vending machines in another person's business "are considered retailers" who must hold one. Selling without it is a Class 1 misdemeanor (SDCL 10-45-48.1).

• Cost: free. "There is no fee for a sales or contractor's excise tax license" (license requirements tax fact).
• Coverage: "One license is sufficient for all the machines of one operator" (ARSD 64:06:03:41). The Department's general advice is a license per business location, but this rule addresses vending machines directly.
• Where to apply: the Department's online Tax License Application.
• Local tax: sales tax applies where the customer receives the product, which for a machine is where it sits (Sales and Use Tax Guide). Report city tax under each city's code on your return. Machines outside city limits owe state tax only. The Sales Tax Rate Lookup gives the rate for any address.
• Tax-included prices: you can back the tax out of total receipts (ARSD 64:06:03:41). At the 4.2% state rate, $100 collected is $95.97 in receipts and $4.03 in tax. With city tax in the price, ask the Department for the factor (Municipal Tax Guide).

You collect the tax, so buy your inventory tax-free

The sales tax on vending sales is yours to collect and send in, so you should not also pay it when you buy the inventory. A business that buys items to resell in the normal course of business may buy them exempt from sales tax. You claim the exemption by giving the supplier an exemption certificate (Sales and Use Tax Guide), and the supplier can rely on it until you file a new one (SDCL 10-45-61).

• Form 2040, Streamlined Certificate of Exemption: South Dakota uses the multistate Streamlined form as its own. Enter South Dakota as the state, your sales tax license number and your type of business, choose resale as the reason and sign. Give it to the supplier, not the Department. Fill in or print Form 2040.
• Blanket certificates: allowed when you buy from the same seller at least once in 12 months, and the certificate stays in force until you cancel it (Exemption Certificate tax fact). Certificates do not expire unless your information changes, though the Department recommends updating them every three to four years.
• Out-of-state suppliers: South Dakota accepts its own form, the Multistate Tax Commission Uniform Sales and Use Tax Certificate and the Streamlined certificate of exemption (ARSD 64:06:01:08.01).

The certificate covers products you resell, not the machines. You pay sales tax when you buy a machine in South Dakota, or use tax on one you bring in from another state, with credit for tax paid there (ARSD 64:06:03:41; Bars and Restaurants tax fact). If you pull inventory for your own use or give it away, report it and pay use tax on your next return (SDCL 10-45-61; SDCL 10-46-2). Knowingly misusing a certificate to evade tax is a Class 1 misdemeanor.

Sales tax rates

The state rate is 4.2% (SDCL 10-45-2). A 2023 law cut it from 4.5% with a sunset, and under current law the rate goes back to 4.5% on July 1, 2027 (2023 legislative updates). If your prices include tax, plan for it.

Cities add their own sales tax. The law caps the general city rate at 2%, with a 1% exception for cities carrying heavy warrant debt (SDCL 10-52-2 and 10-52-2.4). On the Department's city rate chart for July 1 to December 31, 2026, Roslyn is the only city above 2%, at 3%, so the combined rate tops out at 7.2%. Most cities, including Sioux Falls and Rapid City, levy 2%, for 6.2% combined. Machines on tribal land covered by a tax collection agreement report under that jurisdiction's code (Municipal Tax Guide).

What is taxable in a South Dakota vending machine

All of it. South Dakota taxes the gross receipts of retail sales unless the law exempts them (SDCL 10-45-2), and it has no general food exemption. Its food exemptions are narrow ones, such as purchases made with SNAP or WIC benefits. The Bars and Restaurants tax fact puts it plainly: "The gross receipts from vending machines are subject to the state sales tax, plus applicable municipal sales tax."

• Snacks, candy, soda and other packaged food and drinks: state rate plus city sales tax.
• Hot food and drinks: prepared food such as hot soup, coffee or hot chocolate also owes the 1% municipal gross receipts tax in cities that levy it. If one machine sells prepared food and other items, that tax applies to all its receipts unless you keep records of what sold (Bars and Restaurants tax fact; ARSD 64:06:03:41.01).
• Trading cards, toys and merchandise: state rate plus city sales tax. That includes sealed Pokémon product and mystery items.
• Tourism tax: the 1.5% tourism tax reaches all gross receipts at visitor attractions, snack shops included (Tourism Tax fact). At an attraction, ask the Department whether it covers your machines.

The vending rule says nothing about coins, so a card-only machine is taxed the same way as one that takes cash.

Food and drinks: when you need a Department of Health license

The South Dakota Department of Health licenses food service establishments. The law defines them by a list of places, such as restaurants, delis, bakeries, grocery stores and catering kitchens, "in which food or drink is prepared for sale or for service to the public" (SDCL 34-18-1). Running one without a license is a Class 2 misdemeanor (SDCL 34-18-9). Vending machines are not on the list. We found no vending license category or written vending exemption in the statute, the state food service code or the Department's food service licensing page.

• Sealed snacks and drinks: nothing is prepared at the machine, so the license should not apply. No rule says so in writing, so ask the Department of Health's Office of Health Protection if you want it confirmed.
• Sandwiches, salads and other refrigerated ready-to-eat food: the food code covers this food when it is "prepared in a food establishment" and sold from a machine. If the machine shuts off automatically at 41°F, unsold food must be thrown out after 10 days. At 45°F, the limit is three days (ARSD 44:02:07:38).
• Food you make yourself: a kitchen where you prepare food for sale fits the definition of a food service establishment. The license costs a one-time $100, then $90 a year with no seating, plus $25 for each inspection. The Department inspects at least twice a year (SDCL 34-18-10.4, 34-18-11 and 34-18-25.1). Applications are online.

Trading cards, mystery products and claw machines

Pokémon and other trading cards

South Dakota has no special license for selling trading cards. They are taxable merchandise, so the sales tax license covers you. The legal questions with card machines are about intellectual property, not state permits: stock authentic product, and keep Pokémon characters and logos off the machine itself. Our guide to the legal side of trading card vending machines covers both, and the Pokémon vending machine guide covers the business.

Mystery products and toys

Blind boxes, mystery bags and capsule toys are merchandise, taxed at the state rate plus city sales tax like cards and toys. The sales tax license covers them. We found no special South Dakota license for selling them from a machine. See our mystery vending machines page.

Claw and crane machines

South Dakota taxes amusement devices separately. The law lists eight, each coin or bill operated: pool tables, foosball tables, air hockey tables, arcade games, shooting gallery games, dart boards, pinball machines and jukeboxes (SDCL 10-58-1.1). Their receipts pay a 4.2% special amusement excise tax in place of sales tax, with no city tax (Department of Revenue, Amusement Machines). A listed device that takes only cards pays state and city sales tax instead.

• Claw and crane machines: not named on the list. The Department says receipts from machines not on the list pay the 4.2% state sales tax plus any city tax (Amusement Devices tax fact). The list does include "arcade game," so confirm with the Department how to report yours.
• No decals: state registration and decals for amusement devices ended July 1, 2021. Report the tax on your sales tax return.

Federal rules that apply in South Dakota and every other state

ADA reach ranges

Where vending machines are provided, at least one of each type has to meet the operable parts rules in the 2010 ADA Standards (sections 228.1 and 309). The parts a customer operates, like the screen, card reader and pickup door, have to sit within reach: between 15 and 48 inches above the floor for an unobstructed reach (section 308).

Calorie labeling for food

If you own or operate 20 or more vending machines that sell food, federal rules require calorie information for any item whose Nutrition Facts label the buyer cannot see before buying (21 CFR 101.8). In glass-front machines, packages that show calories on the front in large enough type can meet the rule.

Schools

Machines that sell food to students during the school day may stock only items that meet the USDA's Smart Snacks nutrition standards. The school day runs from midnight until 30 minutes after the official school day ends (7 CFR 210.11).

Setting up the business in South Dakota

• Entity: form an LLC by filing Articles of Organization with the South Dakota Secretary of State. The fee is $150 online or $165 on paper. The annual report is $55 online or $70 on paper (fee schedule).
• Income tax: "South Dakota does not have a corporate, unitary, or personal income tax" (Sales and Use Tax Guide).
• Local rules: the Department of Revenue lists vending machine licenses among the licenses a city may issue (Municipalities tax fact). The Governor's Office of Economic Development points owners to their city or county zoning office (New Business Checklist). Check with each city before you install.
• Tribal land: for a machine on a reservation, contact the tribal office about any added licensing, as the Department's Municipal Tax Guide advises.

South Dakota vending permit and license FAQ

Do I need a license to put a vending machine in South Dakota?

We found no general state vending license. You need a sales tax license from the Department of Revenue, which is free and covers all of your machines. A Department of Health license comes in when you prepare food yourself, and some cities issue their own vending machine licenses.

Do I need a food license for a snack vending machine in South Dakota?

We found no license category for machines that sell only sealed, prepackaged snacks and drinks. The Department of Health licenses food service establishments, places where food or drink is prepared for sale (SDCL 34-18-1). If you prepare sandwiches or other food yourself, that kitchen needs a license.

Is vending machine food taxed in South Dakota?

Yes, at the full rate. The Department of Revenue says vending machine receipts are subject to the 4.2% state sales tax plus any city sales tax, and South Dakota has no general food exemption. Hot food and coffee can also owe the 1% municipal gross receipts tax.

Do I need a license to sell Pokémon cards from a vending machine in South Dakota?

No special license. Trading cards are taxable merchandise, so the sales tax license covers you. Stock authentic product and keep Pokémon characters and logos off the machine itself.

How much does a South Dakota sales tax license cost?

Nothing. The Department of Revenue charges no fee for a sales tax license, and one license is enough for all the machines of one operator (ARSD 64:06:03:41). Apply online through the Tax License Application.

Do I pay sales tax on inventory I buy for my vending machines in South Dakota?

Not if you buy it to resell. Give your supplier Form 2040, the Streamlined Certificate of Exemption, with your South Dakota sales tax license number. You then collect and send in tax when the items sell. Inventory you use yourself or give away is taxable.

Is South Dakota's sales tax rate going to change?

Under current law, yes. A 2023 law cut the state rate from 4.5% to 4.2% with a sunset, so the rate returns to 4.5% on July 1, 2027 unless the Legislature changes it.

Sources

1. SDCL Chapter 10-45, sales tax and SDCL 10-45-2, state rate
2. SDCL 10-46-2, use tax
3. SDCL Chapter 10-52, municipal sales tax
4. SDCL Chapter 10-58, amusement device tax
5. ARSD 64:06:03:41, Vending machines and 64:06:03:41.01, municipal rate on vending machines
6. ARSD 64:06:01:08.01, exemption certificate forms
7. SD Department of Revenue, Sales and Use Tax and Tax License Application
8. SD DOR, Sales and Use Tax Guide (July 2026)
9. SD DOR, License Requirements tax fact (August 2025)
10. SD DOR, Exemption Certificate tax fact and Streamlined Certificate of Exemption, Form 2040
11. SD DOR, Bars and Restaurants tax fact (July 2026)
12. SD DOR, Municipal Tax, Municipal Tax Guide (July 2026), Rate Chart, July to December 2026 and Sales Tax Rate Lookup
13. SD DOR, 2023 Legislative Updates
14. SD DOR, Amusement Machines and Amusement Devices tax fact
15. SD DOR, Tourism Tax fact
16. SD DOR, Municipalities tax fact
17. SDCL Chapter 34-18, food service establishments
18. ARSD 44:02:07:38, Food Service Code
19. SD Department of Health, Food Service Licensure
20. SD Secretary of State, LLC forms and Filing Fees
21. SD Governor's Office of Economic Development, New Business Checklist
22. 2010 ADA Standards for Accessible Design and U.S. Access Board guide to operable parts
23. 21 CFR 101.8, calorie labeling of food in vending machines
24. 7 CFR 210.11, competitive food standards (Smart Snacks)