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Gov. Kristi Noem touts campaign proposal to eliminate sales tax on groceries

Tax cut would be largest in South Dakota history, governor says

South Dakota Governor Kristi Noem budget address
South Dakota Gov. Kristi Noem
Republic File Photo
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RAPID CITY — Gov. Kristi Noem announced Wednesday a proposal to eliminate the state sales tax on groceries if she were to be re-elected as governor in the 2022 general election.

Noem made the announcement at Dakota Butcher in Rapid City, surrounded by parents, children and members of the public.

“Today, we’re talking about cutting taxes in the state of South Dakota, and saving families. Saving their budgets, their grocery bills and also their pocketbooks,” Noem told the assembled crowd. “Today, I am proposing that we will follow through and deliver the largest tax cut in the history of the state of South Dakota. Today I am promising that we will repeal the grocery food tax on all grocery items in the state of South Dakota so we can bring relief to our families.”

She said eliminating the 4.5% sales tax on grocery items would be the largest tax cut in South Dakota history, with about $100 million in savings to consumers, and would reduce the impact of rising costs she said was brought upon at the federal level by fiscal and economic mismanagement by the Biden administration.

She slammed the president, his policies and leadership during her presentation.

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“What we’ve seen is that we have had so many families across the state of South Dakota recently that have been struggling to make ends meet because across this country we’ve seen President Joe Biden’s failed extreme agenda and policies driving up costs,” Noem said. “From the way he’s approached the pandemic to the way he approaches business and overregulation to his relationships, or lack of relationships, with companies and businesses who put food on the table, to his persecution of farmers and ranchers.”

According to the governor, prices continue to climb at the grocery store, with the price of ground beef increasing 25%, a gallon of milk increasing 20% and a dozen eggs rising 113% since Biden took office, citing the Federal Reserve Bank of St. Louis.

The tax cut promise indicates a shift for Noem, who has said in the past that repealing the grocery tax would complicate raising teacher and state worker salaries and accused state lawmakers of not debating the isssue thoroughly when discussing similar bills.

South Dakota lawmakers have considered eliminating the sales tax on groceries over the years, and a bill with an amendment that would have done so failed to get past the South Dakota Senate earlier this year.

Noem said during her Wednesday remarks that the state was in a fiscal position to make good on the promise, noting the state’s low unemployment rate, the growth of resident income over the last three years and a $115.5 million budget surplus, and that she believed there was support among lawmakers for such a move if the issue were looked at again.

“Our strong revenues and strong economy in South Dakota allow us to do this because we’ve taken conservative fiscal management and used it to benefit our families here. We have the fastest growth in our economy, the strongest economy, and we also have the strongest growth in housing developments that are happening across the state, and it’s going up faster here than anywhere else in the nation,” Noem said. “This tax cut in the past has received broad support from legislators, and I’m looking forward to them helping me get it across the finish line as well, and I trust that we will get it done.”

Jamie Smith, a Democrat challenging Noem for governor in the November election, criticized the move from Noem as a political play ahead of the election and the upcoming debate scheduled between the two candidates.

“(Seven) months ago, my colleagues and I proposed eliminating the sales tax on food and groceries. It would have saved each South Dakota family $468 a year on groceries,” Smith wrote on his Twitter account following the announcement. “But the bill was opposed by Governor Noem and killed in the Senate. Now she backs it to score political points.”

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Noem said she would continue with her leadership approach and that South Dakota would continue to thrive should she win re-election in November.

“We will continue to take this same approach if given the opportunity to serve as your governor another four years. We will continue to do the right thing for South Dakota because it’s important for our future, it’s important for the state and its foundation, but it’s incredibly important for the families that live here,” Noem said. “For everybody across the state, I hope they realize that we’re not just cutting taxes, we’re saving families.”

Erik Kaufman joined the Mitchell Republic in July of 2019 as an education and features reporter. He grew up in Freeman, S.D., graduating from Freeman High School. He graduated from the University of South Dakota in 1999 with a major in English and a minor in computer science. He can be reached at ekaufman@mitchellrepublic.com.
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