South Dakota
Commercial cleaning is taxable in South Dakota at the 4.2 percent state rate, and residential cleaning is taxable by inference, since the janitorial rule doesn't separate homes from businesses. There's no state income tax withholding on wages, and the minimum wage is $11.85 an hour, rising to $12.30 on January 1, 2027.
South Dakota's janitorial rule doesn't draw a line between a house and an office, and that one detail drives most of what follows. Payroll is simpler on one side, with no state income tax withholding, and moving on the other, with a wage increase in January. Below are sales tax, the employee test, payroll registration, the minimum wage, and what it means for your books.
Commercial cleaning is taxable under ARSD 64:06:02:40, South Dakota's janitorial rule, and the state rate is 4.2 percent per the Department of Revenue's July 2026 guide. Municipal tax isn't covered on this page. Residential cleaning is taxable by inference: no South Dakota source reviewed names house, maid, or residential cleaning, but the janitorial rule has no residential limitation, SDCL 10-45-4 taxes services unless they're specifically exempt, and SDCL 10-45-12.1 lists no exemption for building or carpet cleaning. The detail is on my page on South Dakota sales tax for cleaning services.
Source: South Dakota Department of Revenue, Sales & Use Tax Guide 2026-7 (July 2026)
South Dakota's unemployment test has two parts: freedom from control or direction, and being customarily engaged in an independently established trade. There's no prong asking whether the work falls outside the usual course of your business. The statute is SDCL 61-1-11. I cover how employees and subcontractors each appear in the books in 1099 subcontractors vs. W-2 employees. Whether a particular cleaner is an employee is a question for your CPA or an employment attorney.
Source: South Dakota Legislature, SDCL 61-1-11
South Dakota has no state income tax withholding on wages. Unemployment insurance runs through the South Dakota Department of Labor and Regulation (Reemployment Assistance), which has its own employer registration portal.
Source: South Dakota Department of Revenue, Individual taxes
Source: South Dakota Department of Labor and Regulation
Source: South Dakota Department of Labor and Regulation, General Login (registration portal)
The South Dakota minimum wage is $11.85 an hour, effective January 1, 2026. The Department of Labor and Regulation has announced $12.30 an hour starting January 1, 2027, with a tipped cash wage of $6.15.
Source: South Dakota Department of Labor and Regulation, Minimum Wage
Source: South Dakota Legislature, SDCL 60-11-3.2
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (updated July 1, 2026)
Taxable office cleaning, plus house cleaning taxed by inference, means collected sales tax on your cleaning invoices, and that tax sits in a liability account until it's paid, never in income. I don't trust a total I can't verify, so the balance in that account gets checked against the invoices behind it every month. Supplies and equipment are a separate line: the janitorial rule makes the business their consumer, so the sales or use tax paid on them is part of their cost. Payroll goes in at the wage actually paid, and the job profitability estimator shows what $12.30 does to a single job.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the collected tax and the tax on supplies recorded where they belong; whether a particular job is taxable, especially with residential treatment resting on an inference, is a call for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in South Dakota and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
South Dakota's janitorial rule doesn't separate homes from offices, so collected sales tax runs through a liability account in your books, apart from income. Supplies and equipment are recorded with the tax you paid on them, and payroll at the wage actually paid. Book a short call below and we'll get your South Dakota books ready for January.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
If you clean in South Dakota and want the 2027 wage and your sales tax set up right in your books, send me a note. The first conversation doesn't cost anything.
