South Dakota is in the small minority of states that still taxes food items and a House committee is keeping it that way. House Bill 1149 reduces the state sales tax on food items bought at grocery stores to zero percent. To compensate, all other taxable items increase about 1/3 of a percent. Supporters of the bill say the food sales tax is regressive and has the greatest impact on South Dakota’s poorest citizens. By removing the food tax, it could equal two to three more weeks of groceries a year for families. Representative Bernie Hunhoff says legislators have a chance to give tax breaks to people who can benefit from them.
“It’s a good thing we don’t hear very many four letter words in the legislature, but one four letter word we should talk about more is poor, and fortunately we have talked about it this morning in a very frank way. That’s a good thing. Yes, we have had this bill before us in past years. In some years we felt like we were really under a tight budget situation, we could argue whether that was true or not, but that didn’t seem like the year to do it. Sometimes we get support from both sides of the aisle but never quite enough because it’s never quite the right time,” Hunhoff says.
Hunhoff says this year looks like the time to give tax breaks, as there are proposals to give breaks to international gold mining companies and big banks. Opponents say removing the food tax would move the state’s tax revenue to a smaller basket and make it more susceptible to fluctuations. The House Taxation committee voted to kill the bill 9 to 4.