COUNTERPOINT | Initiated Measure 28 will be devastating for our towns and cities

By Sara Rankin, South Dakota Municipal League of Cities

As South Dakotans head to the polls this fall, a critical ballot measure, Initiated Measure 28, promises to reshape our state’s tax landscape. While its proponents argue it will simplify tax collection and provide relief for consumers, the hidden cost of this measure is a potential $51.5 million blow to municipalities across South Dakota.

IM 28 proposes to alter the current taxation framework by removing state-level sales tax on “anything sold for human consumption.” On the surface, this might seem like a win for consumers, however, this measure is in direct conflict with South Dakota Codified Law (SDCL) 10-52-2, which allows cities and towns to impose a sales tax of up to 2 percent on the same items taxed at the state level. If the state stops collecting tax on these items, municipalities would be forced to follow suit, effectively cutting off a crucial revenue stream.

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