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Written collaboratively by Rhoda Burrows, Ty Eschenbaum (Ag Development Representative, SD Dept. of Agriculture), Carol Logan (Special Tax Division, SD Dept. of Revenue), and Sierra Blachford.

Grape & Wine Production in South Dakota

The wine industry in South Dakota has experienced steady growth over the past 10 years, and demand for locally grown, high-quality wine grapes is strong. In addition to the potential market opportunities, people are attracted to grape growing because they like working outdoors, enjoy working with plants, and enjoy wine. Grapes may be a good alternative crop to traditional agronomic crops, especially on land that is marginal for cultivation.

  • The first South Dakota winery opened in 1997
  • SD wineries have produced over 2.7 million bottles of wine since 1997
  • SD wine production has experienced an average annual growth rate of 17% over the past 5 years
  • In 2012, SD wine captured over 7% of total market share for all wine sold within the state
  • On average, $11.73 of specialty crops yield $67.23 of retail value for 1 gallon of wine alone
  • Another $15.05 of additional revenue is generated by the winery per gallon produced
  • Approximately 1000 gallons of wine production creates another full-time winery job

Grape Production

Enology Information

Midwest Grape and Wine Industry Institute. Based at Iowa State University, the institute serves Iowa, Minnesota, Nebraska, South Dakota and Wisconsin.

Farm Winery Business Plans

The Midwest Grape and Wine Industry Institute collected several feasibility studies for wineries in the Midwest and business planning information.

The following PowerPoint presentations provide information to South Dakota wineries on consumer interests in South Dakota.

2011 State Fair Wine Pavilion Survey

South Dakota Wine - State of the Art & Art of the State

2012 State Fair Wine Pavilion Survey

Becoming a State Licensed Farm Winery

If you are interested in making and selling wine, then you must become a South Dakota licensed Farm Winery. This license was approved by the 1996 legislature. Contact the SD Dept. of Revenue Special Taxes Division at 605-773-3311 to request the necessary packet of forms. After the forms are successfully completed, you will be issued a South Dakota Farm Winery license. The Special Taxes Division can provide assistance with the forms; however, an introduction to each form is listed below.

U.S. Department of Treasury, Bureau of Alcohol Tobacco Tax and Trade

At the federal level, farm wineries need to file for a license with the U.S. Department of Treasury, Bureau of Alcohol and Tobacco Tax and Trade (TBB). Their goal is to process applications within 65 days. Therefore, potential wineries may want to begin this application first because it can be time consuming. Permits can be filed online with the TBB. Filing process steps for submitting permits online are also available.

The Uniform Alcoholic Beverage License Application

At the state level, the Uniform Alcoholic Beverages Application form must be completed. General information about this application:

  • The form must be filed annually.
  • The cost is $100 per year.
  • It is renewable before July 1 of each year.
  • If the business is a corporation, the back of the application must be completed.
  • The “legal description” requested in Section D is the location where the wine will be produced.

Registering your brand with SD Dept. of Revenue

In order to market alcohol beverage products in the state of South Dakota, the products must be filed and approved by the U.S. Department of Treasury, Bureau of Alcohol Tobacco Tax and Trade. After federal approval, the farm winery should fill out the S.D. Alcoholic Beverage Brand – Label Registration Application.


For more information on labeling, please view this article on wine labeling.

State Sales Tax License

Farm wineries need to obtain a sales tax license; to apply visit the South Dakota Department of Revenue website. Or, contact the Business Tax Section with questions at 1-800-829-9188.

Farm Winery Excise Tax

South Dakota licensed Farm Wineries need to complete the Farm Winery Excise Tax Report. This form is completed, filed and paid quarterly.

Wine at Farmers Markets

To obtain a license to sell wine, the entity will participate in a public hearing at the city or county level, and the city council or county commissioners would then issue a license to sell wine at a specific retail location. The cost for a license to sell alcohol varies by city. However, this may prove cost prohibitive for farmers markets.

Another option is to request a temporary off-sale wine dealers license for sales at a special event, such as an arts in the park or special farmers market event.  A licensed farm winery, for example, would apply at the city or county level. There may also be some restrictions on the type of wine that could be sold, depending on the type of temporary license requested and issued. Regular participation at farmers markets might not be practical, as regular weekly sales may not be approved at the local level, and it may not be feasible to pay for licenses at so many scheduled selling days.


Contact the SD Dept. of Revenue Special Taxes Division at 605-773-3311 or 800-829-9188 with any questions regarding the Farm Winery license. The Special Taxes Division can also provide a packet of these forms and licenses to people interested in starting a South Dakota winery.

Wine & Grape Associations

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