PIERRE, S.D. (KELO) — A resolute House of Representatives is standing by its first choice of a smaller state sales-tax rate as the best way to deliver relief to the South Dakota public.
House members rejected the governor’s proposal of a grocery-tax repeal as their first order of business Tuesday morning, without anyone saying a word about it.
Next, they tossed away the Senate’s proposed $425 property-tax credit for owner-occupied homes.
Then, on a voice vote, they said no to the Senate’s smaller version of a state sales-tax reduction.
They called instead for a House-Senate conference committee to negotiate on the plan from Republican Rep. Chris Karr. It would trim the current 4.5% rate to 4.2% and take an estimated $104 million from state government’s revenue stream.
The Senate version proposed 4.3% and would have removed about $69 million of tax revenue.
House Republican leader Will Mortenson spoke on Karr’s behalf. “I would ask for your agreement in hollering out ‘aye’ as we move to not concur and appoint the conference committee, so we can get this sales-tax cut right,” Mortenson said.
Representing the House in the HB1137 talks will be Mortenson, Karr and Republican Rep. Taylor Rehfeldt. She replaces House Speaker Hugh Bartels.
The committee will meet Wednesday morning.
Lawmakers also appear to be waiting to hear from the Legislature’s Joint Committee on Appropriations, as its 18 members decide the final proposed amount for state government’s next state budget that starts July 1.
Senate Republican leader Casey Crabtree, Republican Sen. Ryan Maher and Senate Democrat leader Reynold Nesiba will represent their chamber on the conference committee. Maher is lead Senate sponsor of Karr’s bill and made the motion Monday to pare it to 4.3%.
Earlier Tuesday, a House-Senate conference committee voted 6-0 to recommend that the property-tax credit be set aside. Crabtree indicated that the sales-tax reduction would now be the way to go.
Republican Sen. Herman Otten had led the Senate to approve the grocery tax repeal on Monday. After the House rejection Tuesday, he told KELOLAND News, “I guess the House decided that’s not the direction they wanted to go.” He remains committed to a tax cut this session: “I think we need to do something.”
KELOLAND News sought comment from the governor Tuesday afternoon about the House defeat of the grocery-tax repeal, whether she can accept a 4.3% sales tax rate and whether she can accept a 4.2% sales tax rate. There had been no response from her office as of Wednesday.
Noem had answered reporters’ questions Monday after the Senate resurrected her grocery-tax repeal. At that time, she said the property-tax credit wasn’t true property-tax relief and the checks that the Senate had proposed go to homeowners weren’t a very conservative or a very Republican thing to do.