Repeal of food sales tax rejected by South Dakota Senate
A once-in-a-generation coalition of Democrats and conservative members of the House GOP pushed through an amended bill that removed South Dakota's sales tax on food. A day later, the Senate refused to concur or even appoint a conference committee to work out differences on the bill.
PIERRE, S.D. — A long-sought priority for South Dakota Democrats received an unexpected boost on Monday, March 7, from conservative House members, when the two contingencies joined forces to push through a tax receipt bill that was amended to also repeal the state's sales tax on food.
But a day later, hopes for the measure faded after the Senate GOP leadership voted against concurring with the bill's amendments or even with setting up a conference committee — which is typical in intra-chamber disagreements — to work out differences between the House and Senate versions of Senate Bill 117.
"This extreme bleeder needs to die," said Senate Pro Tempore Lee Schoenbeck, R-Watertown, before making the motion to resist the House's changes to the legislation.
Senate Minority Leader Troy Heinert, D-Mission, attempted to save the bill on a motion, but it failed in a voice vote.
The Senate ultimately voted 22-9 to not concur in changes in HB 117.
It was a remarkable, if anti-climactic end to a 24-hour swing in the House that saw a long-established priority for the state's meager Democratic Party picked up by the chamber's staunchest conservatives. The Democrats see the sales tax on food as disproportionately harmful to lower-income South Dakotans.
In remarks on Monday, Rep. Jon Hansen, R-Dell Rapids, called the repeal overdue at a time of record amounts of state revenue, including roughly $90 million in unappropriated funds.
"I think we ought to give it back to the people," said Hansen, who estimated the sales tax raises $82 million annually.
South Dakota is one of only three states that taxes groceries. A bill to rescind that tax, brought by Sen. Reynold Nesiba, D-Sioux Falls, died earlier in the session.
But the two chambers — particularly Senate and House GOP leadership — have been at odds throughout the legislative session on spending priorities. Hansen brought the motion to repeal the tax on Schoenbeck's SB 117, a bill to pull back certain small fees on businesses.
Some Republicans stared warily at the proposal, with members pointing out losing such revenue could set off a shift and was opposed by business groups.
"This is a debate for another day," said Rep. Mike Derby, R-Rapid City.
But Democrats — albeit briefly — reveled in seeing a longtime priority debated on the House floor.
"Boy, we've talked about this a lot in the last six years, but it never seems it makes it out of committee," said House Minority Leader Jamie Smith, D-Sioux Falls. "It's the most regressive tax we have."
The House voted 47-22 to pass the measure onto the Senate. But Tuesday's action in the Senate means the proposal is almost surely dead.