Tax Rate Issue To Resurrect Next Session

Mar 13, 2019

Credit Jenifer Jones / SDPB

South Dakota lawmakers will wait until next session before seeking to clarify the Partridge Amendment, which reduces the state’s sales tax rate.

Neither legislative chamber could agree on how to define what would trigger a tax reduction.

Several Republican lawmakers want to stay true to a promise placed on the bill that raised the sales tax by .5 percent for teacher pay and property tax relief in 2016.

That promise says for every $20 million dollars raised in online remote seller sales tax revenue, the state will reduce the sales tax by .1 percent—which would offset one another.

The chambers disagreed how to define revenue, whether it be remote sellers or the sales tax as a whole.

State Senator John Wiik is the chair of the committee that sets the budget. He says the legislature will work on this issue during the off season.

Wiik says that will give lawmakers a change to see data on collections.

“Do we reach $20 million this year or not? That’s the determination once we get here and have a complete look at the calendar year from the year before,” Wiik says. “We will move forward there and it will give us a lot more incentive to if we see some online revenue coming in at a value that would trigger the original Partridge Amendment.”

Wiik says the goal is to get South Dakota citizens their half penny sales tax back.

However, the Bureau of Finance and Management says lawmakers will have to deal with an estimated $15 million in lost revenue next session… for fiscal year 2021. That’s because the state will no longer be able to enforce its internet access tax. South Dakota is one of seven states that still assesses a sales tax on internet access. The federal government says states can no longer enforce that tax by June of 2020.