The contractors' excise tax is a 2% tax imposed upon the gross receipts of contractors who are engaged in construction services or realty improvements in South Dakota. The contractors' excise tax and the contractors' sales and use taxes are part of the contractor's total bill and are collectible from all entities, both public and private. State law allows contractors to list their tax expense as a separate line item on all contracts and bills.
The contractors' excise tax is a gross receipts tax. Contractors may use a bid factor to recover the contractors' excise tax due on their total gross receipts.