Argus, Americans for Prosperity writing on $150 million tax increase proposal which has escaped notice. Until now.

From today’s Argus Leader website comes a story about the tax increase proposal no one is really talking much about… Until tonight, on the eve of the measure moving forward in the House, after narrowly passing the Senate.

“The key thing to remember is, we have a limited capacity in our overall sales tax system,” Wiest told legislators at a bill hearing Feb. 4. “We cannot have as a state a 15 percent sales tax when you combine state and local sales tax. That’s not going to work for citizens in the state. They won’t permit it.”

Still, governing bodies in 100 communities across the state have signed on in favor of the legislation. The Senate passed it 19-14 earlier this month. It now goes in front of the House Taxation Committee Thursday morning.


This new legislation would give community residents another option, said Yvonne Taylor, executive director of the South Dakota Municipal League. A property-tax opt out puts the burden only on local residents. Up to an additional third penny in sales tax captures anyone doing business in a community, she said.

Beyond that, governmental bodies decide on property tax opt outs, though their decisions can be referred to a vote. With this new legislation, a vote is mandatory.

Bob Riter, a lobbyist for the South Dakota chapter of the National Federation of Independent Businesses, believes SB 135 if passed could put state businesses at a competitive disadvantage, especially for those near neighboring states that have a lower sales tax structure.

Read it here.

How much would this increase taxes for South Dakotans? According to the note from Americans for Prosperity this evening, it bypasses the $100 million highway proposal that was labeled DOA for being the largest tax increase in state history, and does it better by another $50 million:

It’s the biggest tax increase you’ve probably never heard of.

The legislature is considering a bill that would allow cities to impose an additional 1-cent sales tax increase. If every city in South Dakota participated, it would mean more than $150 million in new taxes.

We Need You To Help Stop It

With all the debate on the highway funding bill, it seems almost no one is talking about this secret sales tax increase. We can’t let this bad tax policy get passed into law! The worst part? The bill was approved by the South Dakota Senate and is headed to the South Dakota House for a vote.

Send a letter to your legislator today: Tell them to vote NO on the sales tax increase!

Instead of finding new ways to let government raise taxes, lawmakers should be looking for ways to reduce the burden of government on taxpayers.

Thanks for all you do.


Ben Lee
AFP South Dakota
State Director

If legislators rejected a tax package which would have cost taxpayers $100 million… Then why is a $150 Million tax proposal sliding through so quietly?

Or maybe not so quietly now that the cat is out of the bag.

25 thoughts on “Argus, Americans for Prosperity writing on $150 million tax increase proposal which has escaped notice. Until now.”

  1. I am not sure where I am on this one. I do not like tax increases in general, but taxes are necessary to run government. Are the communities having a problem? If they are is it due to excessive spending or the cost of doing business? The only way this becomes an increase in the amounts being shown is if every community adds the tax increase. In general, if I have to pay taxes, I prefer to pay taxes at the local level. I believe the local level is the best level to offer government services. This proposal at least makes it a local issue, right?

  2. It would be interesting to add up all the community block grants, water board grants, public infrastructure grants etc. from the State for comparison purposes. Booze in ND is cheaper but food even without a State sales tax is more expensive.

    When does one penny turn into two, and then two into three is the caution in the wind.

  3. This is a joke right? The Senate didn’t pass it did they?

    I just love the argument they are making. “This gives Yankton the ability to tax the people of Tyndall or Gettysburg can tax the people of Hoven. It is government for free.”

    The idea the State would give away it primary revenue source under the logic Watertown can stick it to Henry is an idea I can’t even grasp.

    1. That’s exactly what it is, and it’s what the big towns want. Not too hard to grasp, but it makes me from a small town want to shop the big towns even less.

  4. Lower the taxes enough is enough.We have over a billion in reserve which we will never use, maybe little amounts.Save for the rainy day like the way we WILL NEVER USE IT.

  5. I am totally against this huge tax increase. It is not for running local governments. It is meant for special projects that a local government may want, like building a new rec center, ball park, event center and etc. All nice things but can currently be built if the voters ok them. This is just a ploy to tax in citizens with they having no say in the matter. Bad tax!

  6. The argument that SB 135 is a $150 million tax increase is disingenuous. No one’s taxes are raised by the passage of the bill. The tax increase must be approved by a municipality’s voters before taking effect, and the tax must be for a specific capital expenditure and for a limited period of time. It appears to me that it is designed to be an alternative to a property tax opt out. If a city needs new streets, why should they be limited to raising their own property taxes to pay for it (which the city already has the power to do) instead of raising the sales tax instead?

    The government that is closest to the people is best. So we should give local governments options on how best to raise money for capital projects that the voters believe are important.

    1. “tax must be for a specific capital expenditure and for a limited period of time”

      That is what the Second Penny was suppose to do in Mitchell…a water treatment plant. It is paid for and now the revenue is being used to build Museums and put LED domes on the Corn Palace. Mitchell’s sewage pipes are now in need of repair, so higher rates are being proposed instead of using the Second Penny revenue. And now they want a Third Penny?

      Thanks for covering this issue Pat.

      1. Lol…Sibby you didn’t read the bill either. Specific capital infrastructure project for a specific time period, then the 1 penny goes away. If there is another project it requires another vote.

  7. If it is a local improvement, it should be paid for by local tax dollars. Cities have options such as bond elections and opt outs. This is trying to get ‘outsiders’ to help pay for local improvements.

    1. Then the “outsiders” shouldn’t use the city streets I guess.

      I don’t know that I’m for this or not; another penny doesn’t sound like much, and the voters would get to give it a thumbs up or thumbs down, but it would still be the possibility of more taxes.

  8. It’s a bit of a straw-man argument to say $150 million when we all know not every city would raise their tax. These are not raised easily and they would have to make a pretty compelling argument for people to vote for this. Troy has a valid point but I believe we don’t have to worry about Gettysburg as much as Sioux Falls or other larger towns that get a lot of outside spending.
    On the other hand, raising taxes on essentials like food would create a serious backlash and lead to a potentially a strong push to put exemptions on the ballot leaving us with a huge hole to fill.

  9. Some people should read the bill before they shot off their mouths, but that might ruin all the fun.

    1. This is a very scary idea, and I think they need to take a very good look at what they are saying. In Sioux Falls we voted to build the event center, but no one said it meant the roads would not be built! The sales tax has been used in a number of ways by municipalities that have had an enhanced effect on the quality of life. However, when the citizens are voting on the “fluff” they should be advised that the necessities may suffer.

  10. Interesting. It looks like most of the Senate Democrats voted against it. I was wondering why a 2/3 vote wasn’t required, so checked the language in the Constitution. Sections 13 and 14 of Article 11 only require the 2/3 vote on increases in state taxes.

    I can see the appeal if this passes. Cities will be able to argue they can fund a new project by either increasing property taxes or increasing a tax where a large percentage will be paid by people who don’t live (or vote) there.

  11. PP shame on you for misleading people with this article. You must just want to see drama with a post like this. You fail to tell all the facts about the bill. I would be curious if you have even read the bill. It is an optional tax that must have a specific capital infastructure project and time period and then that package is voted on by local voters, but you somehow fail to mention this in your post. Not every city, probably not even half would pass this because not every city has a lot of sales tax, just look at Harrisburg. PP do some better homework before you stir the nest!!

  12. Republican_ _ _ _ _,

    1) Specific capital infrastructure project: Easy to find since very city has infrastructure projects currently in the budget and funded by current taxes. Phony “protection.”

    2) Time Period: Easy to just say road repairs for the next 20 years. Phony “protection.”

    3) Voted on by the voters: I can see it now “Vote for this sales tax so we can get the people of neighboring towns to pay for our streets.” Its always fun to raise taxes other people pay. See #4 below.

    4) I agree with you that not all cities will pass this but it proves the central point. The “economic centers” will pass it because Aberdeen would love to tax the people of Ipswich, Sioux Falls the people of Canton, Mitchell the people of Parkston, etc. Man this is fun to tax other people. In the meantime, government just got bigger and the State gave away a piece of its revenue source.

    Republicanblasphemer, I’m not sure I’d lecture anyone about being misleading. This entire bill is the epitome of deception by pretending it is innocuous.

    Local governments: If we need it, sell us and raise our property taxes. You can’t sell it, you just proved to me we don’t need it.

    1. Oh Troy, always so colorful. As much as I would love to pick apart each point you made, I will let others see the obvious “phonyism” in them. I do want to say, don’t shop in the big towns (mitchell, huron, aberdeen,yankton, etc…) then. No one is forcing you to do your shopping in those towns. If anything, other towns passing this should strengthen local businesses in towns without the extra penny.

      Question for you Troy, when you travel to these bigger towns do you travel on their roads, do you go to entertainment events and other shops in these towns, which the infrastructure,etc.. was paid for by those local people? If so, then I could say your a free rider and utilizing infrastructure, which you had nothing to do with (Just the reverse of your “phony” #4 argument).

      Would you rather I place toll booths on all roads leading into town? Thereby using your toll will help fund infrastructure projects in the community, what is the difference? Would my toll booth prevent you from coming to my town or would you claim that as a “tax on other people”?

  13. #RepublicanTravolta/Cruise:

    I live in Sioux Falls. I need those streets and willing to pay for what is necessary in my community. Because I’m neither selfish and welcoming, I’m happy to have my neighbors to come to Sioux Falls and drive on my streets as I know I’m welcome to drive on theirs.

    If they come to the Denny Sanford Event Center, eat in our restaurants, stay in our hotels, shop in our stores, I’m most grateful, hope they enjoy themselves and are treated as guests.

    I abhor the attitude they are source of revenue for my locally controlled government so I can have what I’m unwilling to pay to have. And, I resent the insidious and dishonest way this is being presented.

  14. thanks mr. jones. i’d only say that infrastructure that supports and generates activity should be built by taxes generated by that activity wherever possible. the tourism taxes, the bed/booze taxes, the infrastructure sales taxes all are gathered as dollars change hands in a healthy circulating economy. so a number of us aren’t so against this kind of tax on moral grounds. communities and councils can determine if such a tax is the right way to go for themselves.

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