South Dakota Task Force Advances 19 Proposals to Cut Property Taxes
A legislative task force in South Dakota yesterday advanced 19 proposals aimed at reducing property taxes for homeowners, setting the stage for a potentially extensive debate during the upcoming legislative session.
The proposals, finalized at a meeting in Pierre on Wednesday, include a range of approaches, from cutting state spending and redirecting those savings to property tax relief, to increasing sales taxes and utilizing one-time tax credits. Other recommendations involve restricting tax increment financing districts and requiring public votes on school district tax increases beyond state limits. Lawmakers initially hoped to propose legislation cutting the average homeowner’s property taxes by at least 50%, as South Dakota property taxes increased 38.8% between 2020 and 2024.
Nathan Sanderson, executive director of the South Dakota Retailers Association, cautioned that the large number of proposals mirrors last year’s session, where numerous property tax bills were considered but only one was enacted. He suggested a return to a 4.5% state sales tax rate – up from the current 4.2% – could generate approximately $105 million in relief, stating, “We’re not really driving toward any kind of consensus here,” and “We’re throwing a lot of things out there to kind of see what sticks.” For context, property tax burdens are a significant concern for many South Dakota residents, particularly those on fixed incomes.
Several proposals were not advanced by the task force, including removing certain sales tax exemptions and increasing the sales tax rate beyond 4.5%. Additionally, a proposal for a half-percent optional county sales tax to replace property taxes, proposed by Gov. Larry Rhoden, was not considered, though it could still be introduced. A potential citizen-initiated ballot question regarding a transaction tax also remains a possibility in 2026. You can learn more about the South Dakota State Legislature here.
Task force members will now likely introduce these proposals as bills when the legislative session begins in January, and officials anticipate continued discussion throughout the coming months.
