In his State of the State address Governor Dennis Daugaard asked lawmakers to help him find a way to reduce the burden of the contractors excise tax. Opponents of the tax say it hurts businesses who want to expand or locate in the state.
The State Senate Taxation committee heard testimony from experts on the tax as they grapple with the issue.
This interaction between Republican State Senator David Omdahl and the Senate Taxation Committee Chair Republican State Senator Ryan Maher shows part of the challenge they face.
“Nobody likes to pay taxes but one thing if we were to want to phase this out what would we replace this with? And I think that is a key question we have to ask ourselves,” says Omdahl.
“I think if you were to phase this out you’re looking at an income tax,” says Maher adding “What do we replace it with?" "It is a crucial part of our budgeting process,” he says.
“Right,” says Omdahl.
A number of bills dealing with taxation have already been filed before lawmakers this session. They include bills dealing with the bank franchise tax, vehicle taxes, and sales taxes.