Noem's call to end levy on food latest wrinkle in balancing revenue, fairness

South Dakota has long history of wrestling with sales tax

Diane Hunter shops for groceries at Sunshine Foods Oct. 12, 2022, the same morning South Dakota Gov. Kristi Noem toured the downtown Sioux Falls store.

Gov. Kristi Noem’s proposal to eliminate the state sales tax on food would fulfill a policy goal that South Dakota Democrats have been yearning to achieve for decades.

South Dakota is one of a few states that charges sales tax on food, and one of only three that have their full rates applied to food purchases. Democrats in the Legislature routinely sponsor bills each year to eliminate sales tax on food, and those bills usually don’t make it beyond their first hearing.

Now Noem, a conservative Republican whom many Democrats loathe because of her close ties to the former Trump administration, could deliver one of the top policy goals of the Democratic Party. Noem would have the support of the Legislature’s conservative Freedom Caucus, which attempted to cut sales tax by half a percentage point in the last legislative session, a move blocked by the Senate and one that Noem opposed.