HB1137 passes the South Dakota Senate with amendment

PIERRE, S.D. (SDBA) – Legislators say it could be four days if tax cut ping-pong.

On Monday, the Senate passed an amended HB 1137 that would reduce the reduction in the overall sales tax from 4.5% to 4.3%.

As passed in the House, the bill was a 4.2% cut.

Instead of a $100 million-plus tax cut, the bill would be a $69 million reduction in sales taxes and relief to South Dakotans.

The measure passed the Senate 33 to 2.

But even its supporter don’t think this will be the final form for a tax cut.

“We know that in the four days, we’ll have a lot of discussions,” said Republican Majority Leader Casey Crabtree from Madison. “This isn’t your last chance at that. We’ll come up with something great for the citizens of South Dakota.”

An attempt to remove the “sunset” provision of June 30, 2025, failed on a voice vote.

Supporters of that attempt said the termination date was not good tax policy because it was inconsistent and irresponsible.

In its current form, HB 1137 would end the tax cut on that date unless the legislature extends or removes it.

“We need to consider what the economics are in the future, and we don’t know,” said Republican Co-Chair of the Joint Appropriations Committee, Sen. Jean Hunhoff from Yankton. “This gives us two years to see if the economy is going to flourish or not.”

She also mentioned the coming Medicaid, prison funding, and teacher and state employee raises as unknown for the future.

Because of the Senate’s changes to the bill, unless the House concurs, it is likely to go to a conference committee.

Once there, any number of scenarios could emerge.

Republican Gov. Kristi Noem is pushing to end the 4.5% sales tax on groceries. The Republican caucus has been favoring the approach in HB 1137. Other legislators would like to see property tax relief.