While the big news yesterday was Governor Kristi Noem pledging to support a repeal of the sales tax on food, it doesn’t sounds as if the municipal sales tax on food is going to join the State Sales tax in going away, as it is the lifeblood of many communities:
Though both Gov. Kristi Noem and Rep. Jamie Smith – her challenger in the November election – say they want lawmakers to exempt milk, bread and other food items from the list of goods the state now taxes at a 4.5 percent rate, both stop short of a full repeal of food sales tax in South Dakota.
Noem’s campaign said Wednesday after announcing her plan to bring a food sales tax repeal bill to the Legislature during the next session that her proposal – if re-elected – would not apply to a 2 percent sales tax rate that cities across the state are entitled to.
And the Sioux Falls Democrat, who for years has called for an end to state taxation on food, also prefers leaving municipal sales tax alone.
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Interestingly, I had this very conversation yesterday with a State Legislator who voiced the concern that for many small towns, the sales tax on food is their main source of tax revenue. South Dakota Municipalities are likely to line up against cutting a source of revenue where everyone, property owner and renter alike have some skin in the game in funding city services. Especially in communities where they just don’t have that much. Because the alternative would be higher property taxes, or new forms of revenue.