South Dakota Counties Put New Sales Taxes Before Voters to Cut Property Taxes

PIERRE, S.D.—Voters in four South Dakota counties will decide in November whether to impose new local sales taxes intended to reduce property taxes on owner-occupied homes.

Brown and Codington counties will vote on half-percent county sales taxes during the Nov. 3 general election, while Clay and Charles Mix counties are scheduled to hold special elections Nov. 17 after residents successfully referred their county ordinances to voters.

The measures follow legislation approved earlier this year giving South Dakota counties authority to impose a sales tax of up to one-half percent for the first time. Revenue from the tax must be used to reduce the county portion of property taxes for qualifying homeowners.

Several counties have already adopted the new tax without a referendum. Custer, Fall River, Lawrence, Lincoln, Meade and Pennington counties are scheduled to begin collecting the additional half-percent sales tax in January.

The local measures are part of a broader shift in South Dakota’s approach to property-tax relief.

State lawmakers also approved a plan tied to the statewide sales tax rate, which is scheduled to increase from 4.2% to 4.5%. Revenue generated by that increase will be directed toward reducing homeowner property taxes statewide.

Supporters of the changes argue that the approach provides meaningful relief to homeowners facing rising property-tax bills by shifting some of the tax burden toward sales.

Critics have raised concerns that sales taxes are paid by a broader group of consumers, including renters and lower-income residents who may not directly benefit from homeowner property-tax reductions.

The November votes will provide an early test of how South Dakota residents view that tradeoff as counties decide whether to use their newly granted taxing authority.

By: Montana Newsroom wire