B-Gone: Noem wants to cut low-revenue bingo tax and make conceal carry permits free

KELOLAND.com Original

SIOUX FALLS, S.D. (KELO) — Individuals may be able to conceal carry a pistol in South Dakota at no cost under Governor Kristi Noem’s proposal.

Noem proposed during her Jan. 11 State of the State speech for the state to pay for all federally required background checks and eliminate all fees for concealed carry firearm permits.

“It will not cost you a penny to exercise your Second Amendment rights in South Dakota,” Noem said in her speech.

As of Dec. 31, South Dakota had 66,156 active conceal carry permits, according to the Secretary of State.

If the state had paid for all the background checks for those permit holders it would have cost about $2.8 million at the current $43.25 charge.

South Dakota residents and nonresidents who may lawfully possess a pistol are not required to have a permit in order to carry a concealed pistol in the state so the Secretary of State counts all pistol permits as concealed carry permits in a Jan. 12 report to the Joint Committee on Appropriations.

The state has three types of conceal permits, regular, enhanced and gold. The fee for a regular concealed permit is $10. It’s $70 for gold and $100 for an enhanced permit, according to the Secretary of State website.

And according to state law links on the Secretary of State’s website, a fee is split between the state and county or municipality issuing the fee.

While the state does not have history of issuing 66,156 permits in one year, if the state had waived all the fees it would have totaled more than $1 million at current fees.

The 9,020 enhanced permits total about $900,000 in the $100 fee. The 719 gold fees total about $50,000 in the $70 fee. Regular permits of 56,370 total about $563,000 in fees at $10 per fee.

The state issued 11,589 10-year permits in 2021. Using the basic regular permit fee of $10 that’s $115,890.

Since 2017, the number of regular permits active in the state have declined while enhanced and gold permits have increased.

State law links on the Secretary of State website on permits refer to a separate application fee for the basic permit, enhanced and gold in which the application fee amounts differ from $70 for gold fees and $100 for enhanced fees.

State laws refer to $10 for basic permit, $40 for gold and $60 for enhanced permits with the split between the state and the county.

Three dollars of every $10 fee goes to the county or municipality issuing the permit, according to state law.

The state law has this about gold permit fee: “Thirty dollars of the application fee must be retained by the sheriff and ten dollars must be forwarded to the secretary of state for use in administering concealed carry permits.”

According to state law on the enhanced permit fee, “Fifty dollars of the application fee must be retained by the sheriff and ten dollars must be forwarded to the secretary of state for use in administering concealed carry permits.”

The Governor also said she wants to eliminate what she called the bingo tax.

Senate Bill 37 proposes to repeal the bingo distributor license, bingo manufacturer license and bingo tax, according to the South Dakota Department of Revenue’s deputy director of administration strategy and communication Bobi Adams.

“…I am proposing that we eliminate a ridiculous tax,” she said. “This is largely a tax on our elderly populations and veterans.”

It’s also tax which has been generating declining revenue for several years.

The tax Noem is referring to is South Dakota Codified Law 22-25 in gambling and lotteries.

Rachel Soulek, a marketing and communications specialist with the South Dakota Department of Revenue said the bingo tax is five percent on the “gross sales of bingo or lottery equipment and supplies or pull tabs.” 

The tax is remitted by the distributors of the bingo or lottery equipment and supplies and not the establishments that conduct the games, Soulek said.

But if you play, you could help pay the tax.

“The tax is likely passed on from the distributors to their customers and ultimately borne by the end consumer,” Soulek said.

There has been a steady decline in the bingo tax amount since 2011, according to Soulek.

The bingo tax generated $12,328 in revenue in fiscal year 2021, $13,369 in FY 2020 and $10,667 in FY2019.

The FY 2021 revenue was a 48% decrease from 2011 when the revenue was $25,450 according to DOR’s annual reports, Soulek said.

The fees collected from distributor and manufacturing licenses has also been declining, Adams said.

The collected fees for licenses were $20,000 in fiscal year 2019, $22,525 in FY2020 and $20,000 in FY2021.

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