PIERRE, S.D.(Press Release) – The nonpartisan staff of the South Dakota Legislative Research Council (LRC) released an updated estimate of the fiscal impact of Initiated Measure 28 this week. A memo to be presented to the Joint Committee on Appropriations on July 30, 2024, LRC estimates the negative impact to South Dakota’s state budget at up to $646.2 million for the 2025 Fiscal Year – equaling 46.5 percent of the state’s sales tax revenue and 100 percent of tobacco tax revenues.

IM-28 would eliminate sales tax on “anything sold for human consumption,” including tobacco, vaping products, marijuana, and many other items. The resulting budget shortfall would force huge funding cuts or new taxes, including a potential income tax.

Rapid City businesswoman Erin Krueger calls this a trap.

A broad coalition has assembled to oppose IM-28 because of its consequences if passed.

South Dakota Retailers Association Executive Director Nathan Sanderson feels IM28 was poorly written.

IM-28 would also reduce funding for Tribal governments via sales tax compacts with the state and for municipalities. This will lead to huge funding cuts for cities and towns on things like roads, first responders, libraries, pools, and parks.

Sioux Falls Mayor Paul TenHaken talks the impact it would have to the communities.

South Dakota Voters will consider IM-28 in the November General Election. Learn more about IM-28 and to see a list of coalition members, visit www.nosdincometax.com.