The Right Tax Cut –
The Right Time
By: Governor Kristi Noem
December 9, 2022
Over the last couple months, I’ve checked out groceries at stores in communities across South Dakota. One out of every four or five customers had to put something back because of how much it cost. They were shocked at how much their grocery bill has gone up. And it isn’t getting better. South Dakotans need relief – and we can give it to them by eliminating the sales tax on groceries.
Prices are rising far too rapidly on everyday food items like milk, ground beef, eggs, and other groceries. Eggs alone have increased to over 140% of what they were in January 2021. Even with South Dakota having the best personal income growth, family budgets are not keeping up.
When you elected me to serve a second term as Governor, you tasked me with continuing to fulfill the duty of proposing a budget for our state. I recently announced my budget for the next year, and South Dakota has $310 million in permanent revenue growth because of our strong economy.
This means we can afford to eliminate the sales tax on groceries. It is a $102 million tax cut for the people of South Dakota – meaning we still have $208 million in permanent new revenue even after we deliver this tax cut to the people. The people of South Dakota overwhelmingly want this tax cut, and they know we can afford it.
Gas prices continue to increase because of President Biden’s energy policies. New regulations and taxes, a lack of utilization of American energy sources, and a dwindling reserve indicate this trend will continue.
Every South Dakotan is paying more for food, gas, and to heat and cool their homes – including those who can afford it least, like senior citizens, working parents, and single moms. Their family finances are struggling under the strain.
Remember – our revenues are strong because we have grown our economy. It is the strongest in the nation. People have moved their families, their jobs, and their businesses to South Dakota. Our new housing developments are here to stay. New industries are thriving. The jobs of the future are right here in South Dakota. We have the fastest growing incomes in America – and we can grow incomes even more by letting people keep more of their own hard-earned money in their pockets.
This growth is sustainable. And there won’t be a better opportunity in the future. My team and I are fully confident that this is the right tax cut at the right time. I look forward to working with the legislature to get it done.
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I applaud trying to help out our citizens. However , is elimination of the food tax going to be effective? Inflation at 7-8% basically wiped out the 4.5% tax decrease year one. So now we have given savings to the supply chain versus needy citizens. Are there not more effective ways to use these funds? How about capping assessed valuations which will impact all property owners as assessors are drooling over inflated valuations. For renters some sort of assistance based on need/income. Or a subsidy for child care. Maybe a buffet offering so citizens make the choice. Thoughts for our legislators on highest and best uses.
Lowering property tax or re-configuring property tax is another thing to investigate.
Some people want cut, cut, cut, and the same want more, more, more services.
That doesn’t compute.
Spell it with me kids. C A T O institute
Taxing grocery food is sick. Let’s get er done!
I would rather expand the Sales Tax Refund or Credit Program by not changing the tax rate on any items, please continue to tax food, but, if your income is $26,500 or less, allow citizens to submit a claim for a refund up to so many dollars. This way, we continue to tax clothes, food, utilities, etc affording the refund program.
Then, create a Corporate Sales Tax to be applied to anyone who shops at Multi-National Corporations like Amazon, Walmart, McDonalds, Home Depot, and any Online Retailer to help generate revenues. Make this tax 1.5% on top of the 4.5%
Who do you think pays the ‘corporate sales tax’ ?
I will give you a hint, it’s not corporations.
Correcto-,mundo.
State says, Mr McDonalds, you need to pay 1.5% more state sales tax on every BigMac you sell to help others.
Mr McDonalds says, no problem, the price of BigMac just went up 1.5%
I know how the tax laws work, so do not need to be educated. Again, I want to punish ALL CITIZENS who transact with Multi-National Corporations and Shop Online. I am perfectly fine with charging S.D Citizens an extra 1.5% for taking their business outside our jurisdiction. This way, we can lower our in-state sales where S.D Citizens shop with S.D Small Mom and Pop Businesses at 3.0%.
I am tired you people harming our local economies.
hey, you all won your races, relax, do whatever you were going to do anyway. many of us saw this as just election gamesmanship. unless you reeeeeeeeeeeally believe it now.
How about reduce our state expenses and tax cuts will be easier. I am all for better benefits for state employees as Kristi noted in her address, but lets evaluate if we should continue to expand there. We have a lot of businesses that may be affected by a recession. I hope we can keep those businesses open instead of hiring more state employees. It has been proven, contracting work out is more cost effective, than hiring in house.