Backers Push $1.50 Flat Tax to Replace S.D.’s Local Property Taxes
By Scott Sundberg, Hub City Radio, and Todd Epp, Northern Plains News
ABERDEEN, S.D. (Hub City Radio/NPN) — A group wants to kill property taxes in South Dakota.
They’ve filed a proposed constitutional amendment with the state Attorney General’s Office.
Former State Senator Julie Frye-Mueller, one of the measure’s backers, said the proposal would fund county governments through a flat transaction tax applied to most goods and services.
“We’re not trying to take money away from schools or counties,” Frye-Mueller said. “We’re offering an alternative that doesn’t punish property owners.”
Her husband, Mike Mueller, argued the transaction tax would be more equitable and less invasive than property assessments.
“This tax follows your choice to spend, not your right to own,” Mueller said.
Under the plan, South Dakota’s $1.8 billion in property tax revenue would be replaced with a $1.50 charge on most retail transactions. Not a percentage—a flat fee. Buy a candy bar, pay $1.50. Buy a car, same thing.
Matt Smith, a podcaster helping with the campaign, says that makes the system simple and predictable.
“People will know exactly what they’re paying,” Smith said. “It keeps legislators from playing shell games with property values.”
Critics say it does the opposite: it makes taxes less fair and more erratic. A $1.50 charge hits poor people harder than rich ones. And it doesn’t scale with what you buy.
The amendment allows lawmakers to raise the fee—up to $5—if the budget demands it.
“We added that language so they don’t try to open it later and turn it into something worse,” Frye-Mueller said.
The state doesn’t collect property taxes. That’s done by counties, schools, and other local governments. Supporters claim the new tax will cover those costs. They haven’t shown how, at least yet.
Mueller says the details will come later.
“Who’s going to pay for the schools? This will,” he said. “Who’s going to pay for the counties? This will.”
Frye-Mueller says the Legislature could put the measure on the ballot, but she doesn’t trust them to do it.
She was censured by the South Dakota Senate in 2023 for harassing a legislative staffer. That hasn’t stopped her from making the rounds at Republican events.
The state GOP isn’t backing the plan.
“We’re just giving them a venue,” said party chair Jim Eschenbaum. “We’re not taking any official position.”
The group’s website is www.abolishpropertytaxessd.com.
A state property tax task force will meet in Aberdeen on Wednesday, August 13. Time and place are still TBD.
What the Amendment Proposes
The amendment would scrap South Dakota’s $1.8 billion property tax system and replace it with a flat $1.50 fee on most purchases. Backers call it fair and simple. Critics say it hits low-income buyers hardest and hasn’t been tested. The plan allows lawmakers to raise the fee to $5 if future budgets require it.
Gee thanks Pat, you sandbagged me. I started to read the story and then saw JFM’s name and immediately logged off and took a shower.
Not sure how replacing property tax with the biggest tax increase in South Dakota history is going to fly with the voters, but there will be many, many jokes involved, considering who is behind it.
They are complete lunatics. I don’t like property taxes either, but $1.50 on any item you buy? They are D-U-M.
Oh gee… let’s try to come up with the most regressive tax imaginable. Yeah, yeah… what a great idea.
Would there be any gas stations left? Small purchases are what keep them in business.
Can they really be this stupid?
Its not stupid its by design. Keep the poor poor by putting more pressure on them. I does amaze me how multi-millionaires and large companies have need their top marginal rates to tumble, but people making $15-25/hour apparently have all the money in the world.
What a terrible and thoughtless proposal.
They don’t understand economics, a sales tax increase of that magnitude on small items, on top of the current sales tax will kill tourism and businesses. Land prices will spike and people that can, will flee. South Dakota will be owned by absentee owners.
While property taxes need to be moderated, this idea is STUPIDITY!
Does this tax apply to online purchases? If not it will crush local businesses, as people will source from the big box stores. Therefore it’s an awful and stupid idea. If it does apply to online purchases it’s still an awful and stupid idea!
Does anyone want to go in on a transaction broker business with me. We’ll settle up with all of the stores periodically and the customers pay us periodically then it isn’t a direct transaction so it’s not taxable. I almost think that credit cards already have this sort of infrastructure… then we could base our business in some other state (like all of the banks and credit cards will). And then we could claim that there is no nexus for the sales tax or the receipt tax as we have no resources inside of the state. This could single handedly kill the banking industry in SD and then export more tax dollars than ever before. Only JFM and her best buddy Laffy taffy could ever dream up this bad of an idea.
South Dakota’s surrounding states are very much in favor of this plan— it’ll be an incredible boon for their sales tax! Since the majority of the South Dakotan population lives near a state border, it’ll be really easy for South Dakotans to hop across the state border and purchase their goods out of state. All except Mitchell and Pierre. If you live in Mitchell or Pierre, you’re hosed.
so superstore retailers, like Walmart, which sell groceries, clothing, sporting goods, hardware, school supplies etc will do great as everybody will want to buy everything they need in one transaction, while retailers with small specialized inventories will fail?
I support property tax reform, but this is not a realistic or an intelligent approach.
A new nadir of stupidity from JFM.
Walmart already has a subscription service, you can sign up for weekly delivery of fresh food. Most other kinds of subscriptions are annual transactions, so you could pay only $1.50/year for all your groceries?
Apparently. . .
They REALLY haven’t given any serious thoughts into this proposal.
Of course, they’re not capable of serious thinking to begin with