Food taxes probably aren’t going to go completely away.. Candidates saying NO to stripping Municipalities of sales tax on food.

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.

Read the entire story here. (Subscription required)

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.

12 thoughts on “Food taxes probably aren’t going to go completely away.. Candidates saying NO to stripping Municipalities of sales tax on food.”

  1. Would like to see food sales tax repealed, if for no other reason than to starve the beast a bit.

    Also, renters pay property taxes every month when they pony up what they agreed to with their landlords.

    1. You may be smelling the taint of people about to be educated Food tax is a revenue source that everyone fairly pays. If no one is paying, some of the social programs will no longer be funded. Then those same people who no longer have free resources available will cry “foul.” It is going to get interesting. People need to think about the future effects of this action.

  2. Whaaaaaaat? You mean this clear attempt to lionize herself at the last second before the election wasn’t well thought out? Shocked. Shocked, I say.

  3. Or you could tax and regulate the marijuana everyone is already using — and will continue to use — despite its illegality.

    1. so, if we legalize recreational marijuana, I will have the ability to buy a joint AND pay tax on it? I’ll pass. I like the non-taxable version just as well.

  4. It could be Kristi Noem in her own way, placing the item out front before the people making Jaime Smith explain himself during public debates of how to replace the $100,000,000 lost if the “Sic” code is lifted from Food and Groceries. If we lift the ‘tax’ from this category, what will replace that revenue?

    a) do we create a state income tax, which I like many others do NOT support;

    b) do we expand S.D Lottery to generate more revenues;

    The author is correct, any such proposal will NOT lift the sales tax on food or groceries, it only lifts the “state tax” from the category, while it leaves the City Sales Tax to be assessed on food and groceries.

    My thought was we simply ‘adjust’ the rate of the tax to provide South Dakota Citizens relief as they are encouraged to buy local, agreeing to cut the in-state tax from 4.5% to 3.5% giving them a 1% reduction in the tax, while ‘we’ increase the out-of-state tax from 4.5% to 5.5% which punishes any S.D Citizen whereas they buy goods and services outside the “state’s” Jurisdiction, aka “Foreign Transactions” (online purchases, out of state purchases)

    Before now, people claim this strategy is not constitutional, they are not correct. It would be not constitutional if applied to Non-Citizens/residents of the state, however our “sales tax laws” are only applied to S.D Citizens, and NOT citizens or residents outside the “State”.

    Native Americans placing their domicile in their own “Sovereign Territories” can in fact ‘exempt’ themselves from the S.D Sales Tax, just as “YOU” can exempt yourself from the sales taxes in Minnesota and Iowa.

    You only ‘owe’ a sales tax at the point of which you deliver ‘your goods or services’ to your domiciled address of which lies inside the “Jurisdictional boundaries” of the State.

    Therefore, a 5.5% Sales Tax (use tax) applied to ALL S.D Citizens would be equally applied to those ‘citizens” who are domiciled inside the State jurisdictional boundaries.

  5. Unfortunately, pre-election bread and circus frequently turns out to be merely crumbs and a petting zoo.

  6. She’s was clear that her proposal is to repeal / end the STATE’s sales tax on food. She knows a municipal repeal is dead on arrival. Repealing just the state portion is a huge win that most people will probably use to purchase even more food, causing municipalities to collect even more local sales tax.

  7. I plan to proverbially hammer my county commission regarding their approach to acquiring capital/budget post election.

    I understand there are problems, but I do not understand why they paint themselves as powerless to do anything about them.

Comments are closed.