PIERRE, S.D. (SDBA) — The bill’s quick march through the South Dakota House to make last year’s 0.3% sales tax cut permanent is stopped cold in a Senate committee this morning (Thursday)
The Senate Appropriations Committee tabled HB1001 on a 7-2 vote.
The current law sunsets–ends–the decrease to a 4.2% sales tax rate from 4.5% on June 30, 2027.
The bill’s sponsor, Republican Rep. Chris Karr from Sioux Falls, says South Dakota’s economy is strong. Moreover, he says the state has a decade-long history of increasing sales tax collections.
Opponents, however, cautioned that no one can predict what will happen in the future. They also said the legislature can still take a year or two before acting and see how revenues come in.
“We have time to think about this,” Mitch Rave with the Sioux Falls Area Chamber of Commerce testified. “It doesn’t need to be done today. The tax cut has not even been in place a year.”
Karr thinks sunset provisions are “passing the buck” to a future legislature.
“I know some people have a sense of comfort in the sunset,” Karr said. “When we pass a sunset, we’re pushing it off to the future. We come here, we make a decision, we look at the numbers, here’s what we can do. Why keep a tax increase alive?”
Though the committee tabled making the tax cut permanent, nothing is ever truly dead until the legislature adjourns. There are provisions in legislative rules to try to bring the bill before the full Senate. Or it could take on new life in a “hog-housed” bill at the end of the session.