RAPID CITY, S.D. (KOTA) -A bill moving through the South Dakota legislature would keep South Dakota’s sales tax at 4.2 percent permanently.
Senate Bill 195 would keep South Dakota’s sale tax at it’s current 4.2 percent. South Dakota’s sales tax was reduced to 4.2 percent in 2023 with a sunset date on the reduced tax rate set to expire next July, returning the sales tax to 4.5 percent. Senate Bill 195 would eliminate the sunset date and keep the current rate in place. South Dakota House Speaker Jon Hansen is cosponsoring the legislation. He says the rate going up will mean more than 100 million dollars in tax revenue
“An additional over $100 million dollars is going to come out of our pockets and straight to Pierre,” said Hansen. “I don’t want them to happen, and I’ve just become increasingly concerned that if that sales tax rate is going to go up, that there’s going to be so many special interest that are going to come in and try to grab at that money for this project or that project, or this special interest or that special interest. And I feel like we’re going to lose the hard fought tax relief that we fought so hard for in Pierre over all those years”
The bill made it out of the senate appropriations committee on a 6 to 3 vote. It faced opposition from the South Dakota Retailers Association, South Dakota Farm Bureau and Greater Sioux Falls Chamber of Commerce. South Dakota Retailers Association executive directors Nathan Sanderson says he believes the tax should be revert to its previous level so the funds can be used for property tax relief.
“If the legislature is serious about reducing owner occupied property taxes this session, this is the only realistic option,” said Sanderson.
Sanderson says his organization has supported such efforts for several years now.
“Since 2022, we’ve supported using about 0.3 percent which is about 105 million dollars for owner occupied property tax relief, the state of South Dakota has done this past, buying down the education and special education levies and we think that that’s the best option for property tax relief this session”
While an effort to use the additional .3 percent of sales tax revenue from the rate returning to 4.5 percent for property tax relief failed in a senate committee, Sanderson thinks the conversation will continue.
