Another sales tax cut battle brewing in the South Dakota Legislature

House Republicans' top bill for 2024 would turn sales tax holiday into permanent tax cut

(Austin Goss/The Dakota Scout)

Republicans in the South Dakota state House will again make a sales tax cut their top legislative priority.

The first bill to be filed in the state House for the 2024 legislative session seeks a permanent reduction of the state’s sales tax from 4.5 percent to 4.2 percent. The current rate of 4.2 percent is the result of a legislative compromise implemented as a temporary tax holiday last session.

Championed by Rep. Chris Karr of Sioux Falls, the same advocate who ushered this year’s tax holiday into law, the bill strikes the one-sentence sunset clause set for June 30, 2027, allowing the tax rate to continue on without an expiration date.

“After years of surplus and foreseeable tax surplus, it is time that we live up to our conservative values in South Dakota,” Karr told The Dakota Scout. “This tax reduction should be a beacon for all governments, state and federal — that we can live within our means.”

Tax relief emerged as a key focus for policymakers during the 2023 legislative session in Pierre. There were three proposals on the table: cutting the tax on groceries, providing a property tax rebate, and general sales tax cut. 

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