OUR VIEW: Time to make tough choices on taxes

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As a legislative committee seeks ways to raise money for the state through erasure of certain sales-tax exemptions, we wish them luck and encourage state lawmakers to have the guts to make hard decisions.

South Dakota has a laundry list of business types and transactions that are exempt from submitting sales tax money to the state, ranging from sports referees and rodeo bullfighters to myriad agricultural purchases and even political advertising.

That South Dakota even has such inequities is frustrating, and this is a subject that has come up in the past. A few years ago, however, lawmakers decided against considerable paring of the list, and therefore failed to take advantage of an opportunity to raise money for the state.

All told, South Dakota’s sales-tax exemptions are costing the state an estimated $500 million or more annually in lost revenue. Tuesday, the Sales Tax Review Committee — a subcommittee made up of state lawmakers — met to again consider repealing certain exemptions.

Public testimony will come in later meetings. The list of exemptions — those businesses and purchases that aren’t charged sales tax — is long. An 11-page summary of exemptions was passed around during Tuesday’s committee meeting.

The state sales tax rate is 4 percent and hasn’t been raised since 1969. Up to another 2 percent of sales tax can be charged by cities, and up to another 1 percent can be tacked on as a local bed, board and booze tax.

As sales-tax discussions begin anew, we hope lawmakers recognize the inequities that exist on the current exemption list. Of course, there could be some decisions with which we will not agree; overall, we feel the exemption list is unfair in some cases, unrealistic in others.

And if lawmakers cannot create more equity among state sales-tax exemptions, we urge them to again consider a straight increase in South Dakota’s sales tax. If South Dakota’s rate hasn’t been raised in four decades, it may be time to add a penny, which could immediately have a beneficial impact to our injured state budget. Even a temporary sales-tax hike could bring millions to the state, helping to ease some of the state’s financial woes.

These will be tough decisions, but they’re decisions that must be made.

Tags: opinion, editorial, state, legislature, taxes, budget