PIERRE — Is a statewide tax that only collects about $12,000 annually worth keeping? The South Dakota Senate says no.
Lawmakers in Pierre took the next step in repealing South Dakota’s bingo tax Tuesday, Jan. 18, after Gov. Kristi Noem suggested in her state of the state address on Jan. 11 that legislators ditch the “ridiculous” tax entirely.
Following her mention, and at the request of the South Dakota Department of Revenue (SDDOR), the Senate Committee on Taxation introduced Senate Bill 37, to enact the changes to law.
After hearing testimony from Jason Evans, deputy director of the SDDOR, the committee unanimously passed the bill to the Senate floor with a do-pass recommendation.
Currently, all distributors of bingo equipment are subject to a 5% tax on all sales of equipment and supplies in the state. While that tax may not seem like much, Noem pointed out it places an undue target on veterans and the elderly.
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“Did you know that we have a bingo tax? This is largely a tax on our elderly populations and veterans. I’m proposing that we get rid of it, and this is just the beginning,” Noem said. “Although we don’t have many taxes in South Dakota, I am proposing that we eliminate a ridiculous tax.”
In 2021, the bingo tax only collected approximately $12,000, according to data from the SDDOR, a significant drop from 2011’s collection of over $25,000. The decline in revenue led Sen. Josh Klumb, R-Mitchell, to believe the policy is simply outdated.
“Bingo is rapidly decreasing in popularity,” Klumb said. “Simply put, this current tax does not serve the same purpose it used to.”
In addition to the tax, distributors and manufacturers of bingo equipment and supplies are required to pay an annual licensing fee of $5,000 and $2,500, respectively — but lawmakers also voted to ditch those.
As part of the current licensing process, bingo manufacturers and distributors must agree to meet 14 terms and conditions, including the allowance of law enforcement agents to any site and records relating to the production and distribution of bingo supplies, as well as to provide five years of sales records regarding any equipment.
Klumb said the state collected $33,000 in the past year from taxes and licensing fees, and that the regulation isn’t worth the burden, as manufacturers and distributors will pay in their sales taxes regardless.
“Manufacturers and distributors will still be held accountable for taxes on their revenue,” Klumb said.
The bill was passed in the Senate on a unanimous vote, and will move to the House of Representatives for consideration.
