PIERRE, S.D. (KELO) — State lawmakers have been trying to repeal or reduce South Dakota’s sales tax on food since at least 1997 when the Legislature first started putting its records on the Internet. So where do South Dakota’s current candidates for governor stand?

Democrat Jamie Smith, the House minority leader, was a co-sponsor of a repeal attempt in 2017, his first year as a legislator. Smith was a co-sponsor of a similar attempt in 2018. And he’s voted for a repeal as recently as March of this year.

For Governor Kristi Noem, the Republican candidate, the answer has two parts — then and now.

Noem opposed a reduction and a full repeal while she was a member of the Legislature more than a decade ago.

In 2009, then-state Representative Noem voted against a Democrat lawmaker’s proposal to cut the state sales tax on food to 2% from the then-rate of 4%. And in 2010, Noem voted against a different Democrat lawmaker’s proposal to exempt food and raise the state sales tax rate to 4.3% to make up the difference. The House Taxation Committee nonetheless endorsed it 9-6.

But that bill then was sent to the House Appropriations Committee, which set it aside 6-3. When its supporters tried to force it onto the House debate calendar, Noem opposed it again, as part of a Republican majority that stopped it on a 43-25 vote.

Those positions were tested again in the 2022 legislative session.

Representative Chris Karr, a Sioux Falls Republican and chair of the House Appropriations Committee, proposed reducing the state sales tax rate to 4% from its now 4.5%, because much more revenue was flowing into state government than expected. The House passed the bill 39-31, but Smith voted against it. The Senate State Affairs Committee killed it 8-1.

The second test saw Karr and Smith on the same side. A higher-education bill that the Senate had passed was completely amended by House members — a process known in South Dakota political jargon as a ‘hoghouse’ — and turned into a repeal of the sales tax on food. Karr and Smith voted for the amendment and for the bill, which the House passed 47-22. The Senate refused to agree to the repeal, however, and killed it 22-9.

A day later Noem, along with her budget director and chief of staff as well as Lt. Gov. Larry Rhoden, met for 30 minutes with a news reporter to answer questions about the legislative session. Not once during that discussion did the governor or any of the other three indicate any support for repealing the food tax. Nor did the reporter write a story indicating that.

Instead, Noem said, “In my belief, the Legislature adopted too high of revenue estimates for the next year. I think our economy is going to struggle in the next couple of years. Yes, I heard the appropriations chair for the House (Karr) yesterday on the House floor say, ‘The good times are gonna last. We’re gonna have this great economy, for the next several years, at least.’ Well, look at what fuel prices are doing… Our appropriations chairman is thinking we’re going to continue to have people out there spending money and generating sales-tax revenue to keep — So they adopted these high revenues and they’re trying to spend it.”

After a comment about the stock market by her budget director, Noem continued, “I’m trying to be realistic here in what we’re doing in a budget, and the debates they’re having just aren’t sustainable. They’re setting us up to have to come back here and have huge tax increases in a couple of years, and I think we need to make sure we have a little dose of reality this week.”

The reporter, Joe Sneve, then asked about the two pieces of legislation for Karr’s half-percent reduction and the food-tax repeal. Noem answered, “Well it’s just, I think they’re setting us up for an income tax. I think that they know when they propose something like that it’s not sustainable as far as our current programs and they know that they’ll be putting South Dakota in the position to get in, have a significant income tax debate within two or three years.”

A few minutes later, Noem added, “So while they go and propose eliminating the sales tax on food, I understand that debate. We had, when I was in the Legislature, I was on the tax committee, vice chair of tax committee, we debated that every year, and so that is certainly something I’m familiar with. To bring it up the last week (of session) and then not offer cuts to make it actually work, or not to be palms up and say, ‘If we do this then you can’t give six percent to education, you can’t increase teacher salaries, you can’t pay health care providers, and you can’t increase wages for state employees,’ because that’s an honest debate, and they’re not having that right now.”

That was in early March. Turn the calendar ahead a few months to summer. That’s when Rick Weiland of Sioux Falls submitted to the state Legislative Research Council two proposed ballot measures, one a constitutional amendment and the other an initiative, both to repeal the state sales tax on food. LRC director Reed Holwegner wrote back to Weiland on Aug. 12 regarding each proposal. One or both could be on the November 2024 election ballot for voters to decide.

Two weeks later, on Aug. 29, the LRC received the final versions from Weiland, a Democrat. A month after that, on Sept. 28, the Republican governor gave the second half of the answer to where she stood on a food-tax repeal.

Noem declared she would now seek repeal of the food tax if re-elected. She made the announcement at the Dakota Butcher store in Rapid City. Her campaign’s spokesman, Ian Fury, insisted at the time that she had privately expressed support for the repeal back in March.

Fury did so again Friday, in a statement to KELOLAND News: “Governor Noem told Senate leadership that she supported the bill to eliminate the food tax and would sign it if it reached her desk.”

He continued, “Her announcement was based entirely on two things: One, South Dakota’s continued strong tax revenues due to our strong economy; and two, the need of the South Dakota people to receive relief from the skyrocketing cost of groceries caused by President Biden’s inflation. Neither ballot measures nor polling had any impact on her decision.”

A recent survey of 1,500 South Dakota voters for KELOLAND / Emerson College / The Hill asked which of three choices best aligned with each respondent’s view of what should happen to the sales tax on food. The results: 47% chose a full repeal, 32% chose a reduction and 22% said it should stay as is.

On Oct. 19, Holwegner sent the LRC’s fiscal estimates for Weiland’s proposed ballot measures to South Dakota Secretary of State Steve Barnett. He put the impact at $119.1 million.

Jeff Partridge, a former legislator who served temporarily as the governor’s budget director during the 2022 session, was at the March meeting with the reporter. Partridge gave his inside perspective Friday on where Noem stood during the past legislative session regarding the tax on food.

“The governor was interested in repealing the tax on groceries last year,” Partridge, who runs financial planning businesses in Rapid City and Spearfish, told KELOLAND News. “We discussed it at length and did significant research on it. She shared that with the Senate leadership at the time.”

He continued, “However, a better time to introduce this concept is while you are constructing a state budget, which is right now. The governor is finalizing her numbers and they will include a repeal of the tax on groceries, the largest tax decrease in the history of South Dakota.”

Smith sees a ruse. “It shows me they must’ve done some polling, and they’re scared,” he recently told KELOLAND News. “They’re trying to do anything they can to win over voters.”

Libertarian candidate Tracey Quint said that trying to repeal the tax has been a long effort.

“Especially for something as essential as food, we would hope to be able to at least greatly reduce if not eliminate that tax burden,” she recently told KELOLAND News.

Here’s a look at the past quarter-century of attempts to repeal or reduce the state sales tax on food. 

1998 

Representative Linda Barker, a Sioux Falls Democrat, proposed exempting food from the state sales tax. The House Taxation Committee killed it 7-6. HB 1261

1999 

Representative Ron Volesky, a Huron Democrat, proposed exempting food from the state sales tax. The House Taxation Committee killed it 7-5. HB 1119 

2000 

No legislation. 

2001 

Senator Kermit Staggers, a Sioux Falls Republican, proposed reducing the state sales tax on food to 2% from the then-4% rate. The Senate Taxation Committee killed it 5-4. SB 171

2002 

Senator Staggers again proposed reducing the state sales tax on food to 2% from the then-4% rate. The Senate State Affairs Committee killed it 6-2. SB 67 

Staggers also led a small bipartisan group of lawmakers who wanted to exempt food from the state sales tax in North Sioux City and Dakota Dunes. The Senate Taxation Committee killed it 7-1. SB 116

2003 

Representative Mary Glenski, a Sioux Falls Democrat, proposed that food be exempt from the state sales tax as provisions of South Dakota’s expanded sales tax covering remote sales took effect. The House Taxation Committee killed it 11-4. HB 1071

Representative Alice McCoy, a Republican from Rapid City, proposed exempting people whose income was below 200% of the federal poverty level from the sales tax on food. They were to be issued cards and records were to be kept. The House Taxation Committee killed it 9-5. HB 1248

Representative McCoy also proposed that food be exempt from the state sales tax as provisions of South Dakota’s expanded sales tax covering remote sales took effect. The House Taxation Committee killed it 9-5. HB 1249 

2004 

Two Republican lawmakers from Sioux Falls, Representative Ron Williamson and Senator Dick Kelly, proposed phasing out the state sales tax on food over a period of four years. The House Taxation Committee killed it 9-6. HB 1021

A bipartisan group of lawmakers led by Representative McCoy proposed reducing the sales tax on food as South Dakota collected increasing amounts of sales tax on remote sales and exempting food altogether from the tax when South Dakota reached $48 million per year of tax on remote sales. The House Taxation Committee killed it 11-4. HB 1109

Two Republican lawmakers, Representative Steve Cutler of Claremont and Senator Tom Dempster of Sioux Falls, proposed reducing the sales tax on food as South Dakota collected more sales taxes and eventually exempting food altogether. The House Taxation Committee killed it 10-5. HB 1215

Several Democratic lawmakers led by Senator Garry Moore of Yankton proposed repealing various parts of the state tax code and exempting food from the state sales tax. The Senate State Affairs Committee killed it. SB 119 

Senator Gil Koetzle of Sioux Falls and Representative Ben Nesselhuf of Vermillion led a large group of Democrats in proposing that food be exempt from sales tax. The Senate State Affairs Committee killed it 7-2. SB 155 

The Legislature established the food tax refund program at the request of Governor Mike Rounds, a Republican, and appropriated $7.5 million for it. The House voted 69-1 for the program. The Senate eventually passed it 24-11. HB 1308

In November 2004, South Dakota voters considered Initiated Measure 1: “An act to exempt food from sales and use tax.” It lost statewide, as 255,855 voters opposed it while 123,210 supported it. Among the 66 counties, it failed in all but Shannon and Todd. In the ballot measure pamphlet, Reynold Nesiba, a Democrat from Sioux Falls who later won election to the state Senate, wrote the pro side for IM 1, while Governor Rounds wrote the con side.

2005 

No legislation. 

2006 

No legislation. 

2007 

Senator Sandy Jerstad, a Sioux Falls Democrat, proposed reducing the sales tax on food to 3% from the then-rate of 4%. The Senate Taxation Committee killed it 5-4. SB 201

2008 

No legislation. 

2009 

Representative Gerald Lange, a Madison Democrat, proposed reducing the sales on food to 2% from the then-rate of 4%. The House Taxation Committee killed it 12-3. Among those voting against it was Representative Kristi Noem.  HB 1190

Senator Pam Merchant, a Brookings Democrat, proposed exempting food from the state sales tax, increasing the sales and use tax on many other services and goods to 4.5% from the then-rate of 4%, creating a municipal revenue fund, and repealing the state sales tax on food refund program. Among the co-sponsors was Representative Dan Lederman, now chairman of the South Dakota Republican Party. The Senate Taxation Committee significantly amended it and endorsed it 5-4. The Senate rejected it 29-6. SB 199

2010 

Representative Marc Feinstein, a Sioux Falls Democrat, proposed exempting food from the state sales tax and increasing the sales tax to 4.3% from the then-4% rate on various services and goods. The House Taxation Committee endorsed it 9-6, with Representative Noem voting against it. But the House Appropriations Committee tabled it 6-3. An attempt to force it onto the House debate calendar failed 25-43. Among the floor ‘nays’ was Noem. HB 1255

2011 

Representative Feinstein again proposed exempting food from the state sales tax and increasing the sales tax to 4.35% from the then-4% rate on various services and goods. The House Taxation Committee killed it 11-4. HB 1131 

The Legislature at the request of Governor Dennis Daugaard made changes to the state’s sales tax on food refund program, including annual reimbursements to recipients rather than quarterly. The final version passed the House 54-16 and the Senate 31-4. SB 191

2012 

Representative Susy Blake, a Sioux Falls Democrat, led a bipartisan group of lawmakers who proposed making an appropriation to Feeding South Dakota and repealing the state sales tax on food refund program. The final version made emergency food assistance grants available and repealed the refund program. The Senate passed that version 26-9 and the House agreed 61-6. HB 1206

Representative Hal Wick, a Sioux Falls Republican, led a group of mostly Republican lawmakers including then-Senator Lederman in proposing that the sales tax on food be reduced to 3.5% from the then-rate of 4% if certain economic conditions occurred. The House Taxation Committee killed it 8-7. HB 1214 

2013 

Representative Feinstein again proposed exempting food from the state sales tax and increasing the sales tax to 4.35% from the then-4% rate on various services and goods. The House Taxation Committee killed it 10-4. HB 1154

2014 

Representative Feinstein again proposed exempting food from the state sales tax and increasing the sales tax to 4.35% from the then-4% rate on various services and goods. The House Taxation Committee killed it 9-4. HB 1149 

2015 

Representative Ray Ring, a Vermillion Democrat, proposed exempting food from the state sales tax and increasing the sales tax to 4.35% from the then-4% rate on various services and goods. The House Taxation Committee killed it 11-4. HB 1193

2016 

Senator Billie Sutton, a Burke Democrat, proposed exempting food from the state sales tax, increasing the sales tax to 5% from the then-rate of 4% on various services and goods, and increasing the amusement tax to 5% from the then-rate of 4%, and repealing a restriction on state aid to K-12 school districts. The Senate State Affairs Committee killed it 7-2. SB 151

Senator Angie Buhl O’Donnell, a Sioux Falls Democrat, proposed exempting food from the state sales tax and increasing the sales tax to 4.35% from the then-4% rate on various services and goods. The Legislature’s Joint Appropriations Committee killed it 13-5. SB 161

The Legislature passed an act, sponsored by Senator Deb Peters, a Hartford Republican, and other Republican and Democratic leaders, authorizing the state sales tax to apply to businesses outside South Dakota that transact business in the state. Governor Daugaard signed it into law. SB 106

The Legislature passed an act, requested by Governor Daugaard, increasing the state sales and use tax rate to 4.5% from the previous 4%, increasing other state rates and dedicating additional revenue to property-tax relief and teacher pay increases. A key addition to it, known as the Partridge amendment for its sponsor, Representative Jeff Partridge, a Rapid City Republican, says the tax rate would be gradually reduced as revenue rose from charging the tax on remote sales. That broke a deadlock, allowing the House to eventually pass it 47-21. The Senate quickly followed 25-10. Daugaard signed it into law. HB 1182

2017 

Representative Ring proposed exempting food from the state sales tax and increasing the sales tax to 4.85% from the now-4.5% rate on various services and goods. Representative Jamie Smith was a co-sponsor. The House Taxation Committee killed it 11-3. HB 1119

The South Dakota Supreme Court on September 13, 2017, upheld the Legislature’s action regarding the state sales tax applying to businesses outside South Dakota that transacted business in South Dakota. The case was State of South Dakota v. Wayfair Inc., Overstock.com Inc., and Newegg Inc. 

2018 

Representative Ring again proposed exempting food from the state sales tax and increasing the sales tax to 4.85% from the now-4.5% rate on various services and goods. Representative Jamie Smith was a co-sponsor. The House Taxation Committee killed it 10-5. HB 1238

Senator Nesiba proposed changing the Partridge amendment so that additional sales tax revenue from remote sellers would be used to reduce the sales tax on food. The Senate Taxation Committee killed it 4-1. SB 159

The U.S. Supreme Court on June 21, 2018, upheld the decision in South Dakota v. Wayfair. South Dakota Attorney General Marty Jackley argued the case for state government. The nationwide decision came just weeks after then-U.S. Representative Kristi Noem defeated Jackley for the Republican nomination for governor of South Dakota.

2019 

Senator Partridge proposed changing the wording of his 2016 amendment to make the automatic sales tax reduction discretionary as revenues from remote sellers increased. The Senate passed it 28-6. The House tabled it 56-8, with Smith voting for the tabling motion. SB 86

2020 

Representative Caleb Finck, a Tripp Republican, proposed that the state sales tax be gradually reduced by one-tenth of a percent per year, to an eventual rate of 2%, in any year when revenue from it “exceeds the adjusted cost of living plus twenty million dollars.” It also would have repealed the Partridge amendment. The House State Affairs Committee killed it 12-1, with Jamie Smith among the 12. HB 1202 

The Legislature used the final day of the 2020 session on March 30 to deal with a number of bills requested by Governor Noem as state government faced the initial spread of COVID-19 through South Dakota. On July 16, the governor announced state government closed its 2020 budget year on June 30 with a surprising $19.1 million surplus, while spending $74.8 million in federal coronavirus relief funds.

The Legislature met in special session on October 5 and passed legislation giving the governor’s state Bureau of Finance and Management authority to receive nearly $1.4 billion of federal coronavirus aid. HB 1001 

2021 

No food-tax legislation during the regular session. On July 19, Governor Noem announced that state government closed its 2021 budget year on June 30 with an $85.9 million surplus. She credited her open approach to the pandemic for the historic amount.

2022 

Representative Chris Karr, a Sioux Falls Republican, proposed reducing the state sales tax rate to 4% from the current 4.5% and repealing the Partridge amendment. The House passed it 39-31. Jamie Smith voted against the bill. The Senate State Affairs Committee killed it 8-1. HB 1327

Senator Nesiba proposed gradually reducing the state sales tax on items purchased under the state SNAP (food stamp) program until those items had no tax as of July 1, 2026. The Senate Taxation Committee killed it 5-2. SB 166

Senator Lee Schoenbeck, a Watertown Republican, saw a bill he introduced, regarding the state Board of Regents, stripped of its original intent and eventually turned into an attempt to repeal the sales tax on food. Representative Jon Hansen, a Dell Rapids Republican, amended the bill on the House floor to repeal the state sales tax on food. House members adopted the food-tax amendment 44-26 and passed the hoghoused legislation 47-22. Jamie Smith voted for the Hansen amendment and for the hoghoused version of the bill. The Senate, where Schoenbeck was the top member as president pro tem, however refused to agree to the food-tax repeal and killed it 22-9. SB 117 

On July 18, Governor Noem announced that state government closed its 2022 budget year on June 30 with a record surplus of $115 million and said South Dakota “has the strongest economy in America.” 

On August 12, the Legislative Research Council responded to Rick Weiland, a Sioux Falls Democrat, regarding his proposed constitutional amendment and proposed initiated measure that would ask voters to repeal the state sales tax on food. On August 29, the LRC received from Weiland the final versions of the two proposed ballot measures. 

On September 28, Governor Noem declared she would now seek repeal of the food tax if re-elected. She made the announcement at the Dakota Butcher store in Rapid City. Two days later, Noem in her weekly governor’s column said the food-tax repeal would be part of her budget proposal for the 2023 legislative session.

On October 11, a variety of Republican legislators called for a special legislative session on November 3 to repeal the food tax. 

On October 19, LRC director Reed Holwegner submitted fiscal notes to South Dakota Secretary of State Steve Barnett on the estimated financial impacts of each of Weiland’s proposed ballot measures. Both said the state treasury could see an impact of $119.1 million.

On October 26, an LRC memo showed too few legislators had signed the petition for the November 3 special session.