One question on the November ballot gives South Dakota a chance to weigh in on the state’s grocery sales tax.
Initiated Measure 28 would eliminate tax on items sold for human consumption, which the state has historically taxed at a rate of 4.5%.
It was discussed at SDPB’s Thursday vote South Dakota town hall.
Proponents for its repeal, like Rick Weiland with Dakotans for Health, say it’s time to remove a tax many on both sides of the aisle consider “regressive.”
“Because 106,000 South Dakotans are food insecure according to Feeding South Dakota – that means they don’t know where their next meal is coming from - and 1 in 6 of them are kids," Weiland said. "We could have done this with the Governor, and she said ‘make that tax cut temporary,’ and it is. I have a list here of $1.4 billion of sales tax exemptions in the 2025 budget.”
State Retailers Association executive director Nathan Sanderson spoke in opposition. He said there’s no way to recoup the funds that would be lost with this tax repeal.
“Whether its $123.9 million which is the low end of the estimate the Legislative Research Council gave a year ago, or whether its $646 million which is the high end of the Legislative Research Council estimate – either way we’re still talking about more than $100 million of lost revenue to the state of South Dakota," Sanderson said. "Our organizations believe this is going to lead to significant tax cuts like education or healthcare that make up 80% of our budget, or it’s going to lead to higher tax increases.”
Sanderson also said the measure’s language could also prohibit sales tax on things like tobacco. Weiland pushed back, saying those fears are overblown.
South Dakota is joined by only Mississippi in continuing to enforce a full sales tax on grocery items.