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PIERRE, SD (KELO.com) — It’s the second part of what Governor Larry Rhoden calls the largest property tax cut in South Dakota history. Critics say the proposal approved by the state Senate Wednesday morning is more of a tax shift than a tax cut. It will be funded by a sales tax increase scheduled for next year. The state sales tax rate will increase from 4.2% to 4.5% in July of 2027 due to a sunset clause in a sales tax relief package approved in 2023. Sioux Falls Senator Chris Karr says that could tarnish the state’s reputation as a low-tax state, with some communities charging as much as 8% in sales tax.
Senate Majority Leader Jim Mehlhaff argued the plan checks a lot of boxes. “This provides statewide (property tax) relief, it provides more relief to the places that are hurting the most and spreads the tax base for the way we fund education. The measure would reduce property tax by about $550 on a home valued at $325-thousand. The bill now goes to the Governor’s desk for his signature.
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