South Dakota legislature still grapples with grocery tax cut

South Dakota Republican Gov. Kristi Noem testifies at the capitol in Pierre, S.D. in support of...
South Dakota Republican Gov. Kristi Noem testifies at the capitol in Pierre, S.D. in support of her grocery tax repeal proposal that she championed during her reelection campaign last year on Tuesday, Feb. 21, 2023. The bill failed as House Republicans voted to support a different tax repeal policy instead. (AP Photo/Amancai Biraben)(Amancai Biraben | AP)
Published: Mar. 7, 2023 at 9:48 AM CST
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SIOUX FALLS, S.D. (Dakota News Now) - The House Taxation Committee soundly rejected the grocery tax cut earlier this session, but the chamber will have a chance to revisit it this week.

A “hog housed” bill by Senator Ernie Otten brought the grocery tax cut back in the senate - managed to pass on Monday.

“There are two horses in this three-horse race... there is the .2% cut on the sales tax cut rate. There is the $420, state-funded property tax refund,” said Otten.

The Senate had passed a diluted version of the sales tax cut that the house preferred earlier in the day. They shrank the amount of the cut and put a “sunset clause” on it.

Senate leadership prefers the property tax cut rebate or the scaled-back sales tax cut.

“The grocery tax cut has been defeated twice by our friends in the house. They are ready to get to work to make sure we get something solved on this issue and make sure we get a tax cut for the people of South Dakota,” said Senator Casey Crabtree.

The biggest opponent to the property tax rebate is Gov. Noem, who threatened to veto the proposal on Monday.

“They wanted to consider looking at a property tax cut, at a much lower rate, a property tax at a much lower rate... the senate hasn’t done any of them,” said Noem. “Schoenbeck said his constituents wanted property tax cut reform. They didn’t even do that. They did a rebate program that would send people checks... that is not very conservative.”

Noem, based on a poll her team commissioned last month, also pointed to the popularity of the grocery tax cut.

“My concern, Austin, is that these legislators really don’t want to cut taxes. When you think about it, if they reduce the sales tax rate overall by thirty cents every one hundred dollars, people won’t notice it that much, versus if you reduce the sales tax amount on groceries,” said Noem.

The House could consider the grocery tax cut as early as Tuesday. Noem will host house lawmakers tonight at the Governor’s mansion to discuss the proposed cut.