Lawmakers to weigh revived tax cut proposals ahead of Thursday deadline
With three more legislative days to go, state lawmakers are no closer to delivering a particular tax cut.
All three major proposals are back on the table.
Those three proposals are eliminating the state sales tax on food, cutting the overall sales tax and delivering a $425 rebate for owner-occupied dwellings.
While the last one isn’t a tax cut, it is a preferred way by many Senate Republicans to alleviate the state’s property tax burden on residents. House lawmakers rejected a similar proposal. The two chambers will meet to work out their differences.
On Monday, Senators narrowly revived an effort to repeal the state sales tax on food. The House has also rejected that idea twice.
Senate Majority Leader Casey Crabtree said many discussions will take place in the coming days.
“We’re going to make sure that we get a good reduction in taxes for the folks of South Dakota,” Crabtree said. “At least that’s where I’m at.”
House lawmakers have sent three identical proposals to the Senate—to reduce the overall sales tax rate from 4.5 percent down to 4.2 percent. Senators have amended the percentage slightly and added a sunset clause.
House Majority Leader Will Mortenson said the House is steadfast in their position.
“We would not be putting forth this tax cut if we didn’t think it was sustainable and prudent not just today but ten years from now,” Mortenson said. “While the Senate might be confused as to what they want, the House is not. We know that we want a broad based, permanent, substantial tax cut.”
Meanwhile, Gov. Kristi Noem said lawmakers are hedging their bets on the overall sales tax cut, which she says will increase in the future if is needed.
“They just don’t want to do the hard work of cutting taxes,” Noem said. “If we eliminate the sales tax on grocery items it’s gone. We’re not bringing that tax back.”
All three of the major proposals would cut or cost around $104 million. Lawmakers say they will hash out their differences and craft a budget in the coming days. Regularly scheduled legislative session ends on Thursday. But Noem said the conversation could go much longer.
“Listen, we don’t have to pass a budget this week. If these legislators want to sit here and take a couple months to do the right thing, I’ve got nowhere to go," she added.