First Hearing For 3rd Penny Sales Tax Bill

PIERRE, SD - A bill that would allow cities in South Dakota to raise the sales tax another penny will have its first hearing in Pierre Thursday. The main backer of the bill is the City of Sioux Falls.

City officials want to use the extra money generated by the tax to build a new events center. But Sioux Falls isn't alone; the South Dakota Municipal League says 92 different communities have already voiced their support for the bill.

The bill would allow cities in South Dakota to hold a public vote to raise the sales tax by an extra penny. It would mean you would be paying an extra $1 in taxes every time you spent $100. The money would have to be used for large projects that cannot be paid for from other areas of the city budget.

The bill also says that a city must tell voters how long the extra tax will be into effect and when it will end. Sioux Falls estimates the extra penny tax would have to be charged for three to four years to raise money for the events center.

A hearing in the House Local Government committee will be held Thursday at 10 a.m. and Mayor Dave Munson plans to testify about the bill. But it's only the first step in the five-step process of passing the third penny sales tax bill through the legislature.