The grocery tax question has been on the table for decades in South Dakota. Now, a Senate committee has advanced a proposal to put the question to the public with finality.
Two twin proposals aim to tackle the state’s grocery tax in two slightly different ways – one via legislative action and the other via the ballot box. While the bill was killed, the joint resolution has advanced to the Senate floor.
Both were brought by Sioux Falls Democratic Sen. Reynold Nesiba, who said he modeled the legislation after Gov. Kristi Noem’s 2023 proposal.
“We passed a temporary sales tax cut from 4.5 to 4.2 a year ago," Nesiba said. "We’re now at a perfect time where we can eliminate the 4 cents the state gets from the sales tax on food and take the ordinary rate back up to 4.5 percent. My preference would be the Legislature controls this process and it’s not the initiated measure process on the outside. I often think the initiated measures are a result of a frustrated public.”
The third of a percent dip would only continue for three years. For Hartford Republican Sen. Brent Hoffman, it’s a matter of permanently removing regressive policy.
“Exchanging a temporary tax cut – which it is no doubt now, it’s a “sales tax holiday” as the executive branch refers to it – for a permanent tax cut, is good policy,” Hoffman said.
There’s a big difference between the Senate’s joint resolution and the current initiated measure. The measure would remove the South Dakota grocery tax – full stop. In turn, JR510 would keep the taxing structure in place for local governments to use while removing it for state government.
That distinction was the decider for Mitchell Republican Sen. Josh Klumb, who voted no on the bill but yes on 510.
“I don’t want to see the sales tax on food go away," Klumb said. "By leaving the one that might make it on the ballot, it takes it away from municipalities. But I also agree that if somethings going to pass, this would be the better one to pass.”
If lawmakers pass SJR 510, proponents said they expect the similar initiated measure to be pulled from ballots.