Property Tax Task Force Proposes Many New Tax Increases

The Comprehensive Property Tax Task Force, a group of legislators responsible for generating and vetting solutions to contain property taxes, met for the fourth time last week.

The Task Force has one more meeting scheduled before the 2026 legislative session and has yet to endorse a plan or identify one that appears viable. Their stated goal is to offset $400 million of Owner-Occupied property taxes when they gavel out Oct. 22.

However, finding $400 million in ongoing revenue is a steep challenge, and the initial proposals include MANY new tax increases on businesses. Just a few of the recommendations include:

• Increasing the state’s share of video lottery proceeds from 50% to 60%
  (taking almost $34 million from small businesses each year)
   
• Increasing taxes on alcohol, tobacco, and vaping products by 25% to 40%
  (a hike of more than $30 million each year)
   
• Increasing the Contractor’s Excise Tax from 2% to 2.5%
  (another $55 million tax hike each year)
   
• Creating a new penny per ounce tax on “sugary drinks”
  (a burden of more than $60 million on grocers, convenience stores, and others each year)
   
• Creating a new tax on advertising, radio, and TV broadcasting
  (another $48 million in new taxes on businesses each year)
   
• Creating a new tax on credit card processing services
  (an additional $20 million burden on businesses each year)

All told, that’s almost a Quarter Billion Dollars in new taxes on businesses. These (and many more) proposals are available at https://sdlegislature.gov/Interim/Committee/505/HearingDocuments . Look under State Finance Workgroup, options 1-8.

The Retailers will continue to engage closely with this Task Force, attend the October meeting, and work to prevent bad policies that hurt businesses or damage South Dakota’s business-friendly environment.