A newly formed coalition is forming to oppose a ballot question meant to remove the state sales tax on food.
The group worries Initiated Measure 28 could lead to a state income tax.
South Dakotan’s Against a State Income Tax is comprised of 16 organizations from South Dakota Retailers to the Education Association.
Initiated Measure 28 eliminates the state tax on anything sold for human consumption. The new group said that could include tobacco and CBD.
The coalition said that could cost the state over $176 million a year and lead to budget cuts.
Nathan Sanderson is the Executive Director of the South Dakota Retailers Association. He said a broad-based sales tax regime allows the state to keep taxes low.
“It's going to reduce funding for the tribes. It’s going to reduce funding for cities and towns. It's going to require cuts to law enforcement and roads, and pools, and parks and all those kinds of things. It's going to set South Dakota up for a state income tax to cover the needs of services, the money has got to come from somewhere,” said Sanderson.
Because IM 28 is an initiated measure, lawmakers can adjust the law if it is approved by voters.
Sales and use tax is the state’s primary revenue generator.
But some consider the food tax regressive and say it disproportionately affects lower-income South Dakotans.
Rick Weiland is the primary backer of the ballot question. He said Republicans have been distorting the ballot measure question to confuse and discourage people from supporting it.
“They want to believe that local governments are going to be impacted by this and not be able to collect a tax. That is not what Jackley said and certainly not what the LRC said and it’s certainly not what the petition says. Yet they continue to propagate that misinformation,” said Weiland.
South Dakota voters will weigh in on the ballot question this November.
