Legislators override veto on livestock bedding tax exemption

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PIERRE — A big grin showed just how happy Rep. Dennis Feickert was Thursday morning.

The state House of Representatives voted 68-2 to override the governor’s veto of his legislation granting a tax exemption on livestock bedding.

“That’s super,” Feickert, D-Aberdeen, said afterward. “It’s not so much the money. It’s a matter of principle.”

The Senate considered it next and kept the smile on Feickert’s face. The vote was 26-6 to override.

State Revenue Department lobbyists had spent the intervening five hours speaking to senators, looking for support to sustain Gov. Dennis Daugaard’s veto.

Members of the governor’s executive staff hovered near the rear of the Senate gallery watching the debate.

The exemption would apply only to consumable bedding, specifically straw, corn stover and bean straw, used for agricultural purposes.

Senate Democratic leader Jason Frerichs, of Wilmot, said dairy operators are being targeted and audited for six previous years. That’s how the bedding issue reached the Legislature.

“There’s an impropriety in the law that we can fix with this legislation,” Frerichs said.

Sen. Tim Begalka, R-Clear Lake, said he learned about Revenue’s practice last year. He said the audits are going back six years but there was no prior notification to producers.

Two operating dairy plants and the new one planned at Brookings will require milk from 130,000 cows daily, and there are 92,000 cows in South Dakota now, Begalka said.

“No other state imposes such a tax,” Sen. Shantel Krebs, R-Renner, said. “We are an agricultural state. They’re our No. 1 industry.”

Sen. Al Novstrup, R-Aberdeen, said it is “a fairness issue.” South Dakota’s policy is broad taxation at a low rate, he said.

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