PIERRE, S.D. (SDBA) — Voters could see a legislative-endorsed measure on the November ballot that would end the sales tax on food.
The Senate Taxation Committee voted 5 to 1 this morning (Friday) to send SJR510 to the Senate.
However, the committee also defeated a similar bill that would have the legislature and governor enact removing the 4.2% sales tax on food.
While most of the Republicans on the committee expressed dislike of the resolution to put the tax repeal on the ballot, they said SJR510 was better drafted than another possible citizen-initiated measure that could go on the 2024 ballot. They also noted that the passed resolution would not take the local 2% sales tax off food, while the citizen-proposed measure would.
Essentially, they said there would be less for legislators to “fix” or deal with in budgeting if the legislative-endorsed measure won in 2024. Moreover, supporters of both SB164 and SJR510 said the measures were budget neutral, as other taxes would increase if the sales tax were removed from food. The citizen-led effort, they said, would not be budget-neutral.
Last year, supporters testified that removing the sales tax would remove about $104 million from state revenues.
The measures’ sponsor, Democratic Sen. Reynold Nesiba of Sioux Falls, said he took the language for both measures from Gov. Kristi Noem’s bill last session to remove the sales tax on food.
The committee voted 5 to 2 to send SB164 to the 41st day, effectively killing it. After an attempt to do the same failed 3 to 3 on SJR510, the committee voted 5 to 1 to send SJR510 to the Senate.
