AFP Files initiated measure to reduce sales tax

21 thoughts on “AFP Files initiated measure to reduce sales tax”

1. Good for them. The idea that some legislators now want to spend the money instead of lower the rate, like they sad they would, is ridiculous.

2. So much for that out-of-state money ban!

3. It’s not a ridiculous idea if you never believed they’d follow through with it anyway.

   SD GOP, out there raising taxes and breaking promises.

4. Reducing the sales tax rate helps every taxpayer but it helps most those in need. Let’s do it.

5. I would not count on money from online sales tax to be a permanent source of state revenue. I project that Congress will make a serious push within 10 years to replace any online state taxes with a federal online transaction tax, claiming that all of this interstate commerce needs to be taxed to help fund roads, internet access and the postal service that make online commerce possible.

   1. Yep

      1. Nope. Online sales will balloon shutting down every JC Penny store in the world, and Starbucks going to a drone delivery method ends all brick and rock commerce. UPS and the USPS become the two most powerful organizations in the world, which has descended into a world like the world of Mad Maxamillion with tribes fighting with sharp sticks. The winner will be the government agency which will control the entire world.

         I, for one, welcome our new USPS overlords.

6. Reduction of sales tax will lead to budget shortfalls. Budget shortfalls will lead to a state income tax. At some point near the end of her second term, Noem will sign a bill instituting a state income tax.

   1. But I thought we’d get a windfall of money if we taxed all the online folks? Were we misled?

   2. That would be some solid evidence of manmade climate change since it will be a cold day in hell when a SD gov institutes a state income tax

      1. Wait and see.

         1. I’ll take that wager.

            Let’s assume, for the purposes of argument, we lower the sales tax rate .1 percent

            Good news! Each South Dakota family keeps a little more of the money it earned. We want that outcome.

            We’ll spend most of that savings here, buying more stuff at Menards, Hy-Vee, Scheels, Campbell’s. You name it.

            Local business feel a boost. This creates investment & jobs. The economy grows. Wages inch up ever so slightly.

            Local taxing authorities thus recapture a fair portion of the money… but not all of it. Likely there would be a shortfall.

            But our legislators won’t cut the sales tax rate unless they expect, in good faith, to pull millions from online sales tax revenue. That’s money ADDED to the equation, an addition that replaces most of the loss.

            After we cut sales tax, out of staters (tourists, folks from neighboring states, drivers passing through) will buy more here as well. No, you wouldn’t expect a dramatic shift, but whenever we lower prices we spur consumption. Local businesses benefit.

            In exchange for these benefits, we’ll need to balance the budget.

            Would we resort to a state income tax? I *seriously* doubt it. I believe legislators will find it easier to close, for example, a 10-11 million dollar revenue gap via smart budget cuts. It seems VERY unlikely they’d go nuclear & resort to an income tax – something SD voters have categorically and unambiguously rejected. Plus, there are other ways to boost revenue. Allowing sports wagering in casinos, to cite just one example debated on this website, might increase state revenue $2 million per annum. If you don’t like that idea, there are others.

            I agree future online sales tax revenue is difficult to forecast. And, as someone noted, we could lose online sales tax revenue down the road. But if and when that problem arises, we can reset our sales tax back to 2018 levels. In the meantime, SD benefits.

            In 2016, the average South Dakotan shelled out more than $2000 to the state. We’ll help working families, we’ll become more competitive, and we’ll attract more skilled workers if we trim the fat & nudge the number down toward 1950. For comparison, Texas, whose citizens paid (on average) $1871, led the nation in economic growth, whilst California ($3955 per taxpayer) faces bankruptcy.

   3. So, are you advocating that we remove the automatic tax cut language currently on the books that reduces the sales tax rate from 4.5% to 4.0%?

      1. How much online sales tax revenue do you expect our state to collect next year? $10 million? $20 million? $99 million?

         I’d guess under $40 per SD resident, but I’m no expert. How much stuff do folks buy online? What’s the monthly average? I cede the floor to those with greater knowledge. Maybe I’ll attend the AFP event and see what data is offered.

7. Don’t be fooled. AFP exists solely for the purpose of serving the Koch brothers, who attempt to impose their agenda upon us because they believe we are not capable of recognizing good governance on our own. Pure and simple, just another source of out of state money, trying to control S.D. politics and citizens.

   1. Pretty sure that keeping taxes low and holding legislators accountable are South Dakota values, tried and true.

   2. I dunno: a socialist lover almost got elected governor, so SOME of the folks in SD don’t recognize good governance.

   3. So how is South Dakota’s reduction in sales tax going to benefit the Koch brothers? Are they planning a major vacation to this state? Heidelberger is making the same illogical argument, whose purpose is simply to promote hatred within his group of Kool-Aid drinkers against those he disagree with.

8. I get the what AFP is trying to do but I question the strategy and timing of announcing an IM before the legislature can even pass legislation to lower the sales tax in accordance with the Partridge Amendment.

   I believe the intended effect is to hold the Legislatures feet to the fire on the issue but in reality I think it does the exact opposite. Why would a legislator who doesn’t want to lower the sales tax feel any pressure to do so knowing that in the next election he or she could just let their constituents decide and be able to avoid a potentially controversial vote? Speaker Mickelson tried this with his tobacco tax increase and it didn’t even make it out of committee.

   What would have been more effective for both passing it in the legislature and (if it came to it) on the ballot would have been to hold off on this announcement until after Session, pressured the Legislature to keep their commitment to the voters by passing a sales tax cut, and if it failed in the Legislature use that as a rallying cry to build support for the IM.

   Instead, Legislators that really don’t want to cut the sale tax now have an out to say “Well I’ll just let my constituents decide.”

   1. For the record, the only reason I supported the online tax is because it was my expectation there would be a sales tax reduction (no revenue increase to the state between the two). My thoughts exactly.

      1) People always meet expectation. Thus, this makes it seem as we have an expectation they won’t do this. I think we should begin with the expectation they will do this. We have plenty of time to do the IM.

      2) People will take an out if you give it to them. Your comment is right on. I prefer to hold them to the fire for what is already on the books.

      3) I’d like someone to explain to me we even need a law change. In short, what is deficient in the Partridge Amendment and can’t it be just done via Administrative Rule by the Department of Revenue. It wouldn’t be the first tax law which is implemented via rule as it is more effiecient this way.

   2. If legislators decide not to do the right thing and vote against a tax cut, there will be plenty of time to make sure their constituents hear about it. Who wants to be the one voting against tax cuts?

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