The South Dakota House on Wednesday overwhelmingly passed and sent to the Senate a bill cutting the state sales tax from 4.5% to 4.2%. It would be the largest tax cut in state history at $102-to-104-million dollars.
Prime sponsor Representative Chris Karr told his colleagues the bill honors a promise made in 2016 to reduce state sales taxes by using the massive projected state surplus to give those dollars back to the people.
Karr said “It’s realistic. It’s responsible. It takes surplus dollars and provides meaningful tax relief.”
Dropping the overall sales tax rate by 3-10ths of a penny was recommended over the weekend by the House Republican Caucus over Gov Kristi Noem’s proposal to eliminate the sales tax on groceries.
The bill’s fate in the state Senate is unclear with some senators worried if the state’s current revenue growth is permanent and others wanting to use the windfall to address a variety of state deficiencies.