Revenue secretary says South Dakota tax collections running stronger than expected

Capitol News Bureau
KELO Pierre Capital Generic

PIERRE, S.D. (KELO) — With 8% growth the past two months, South Dakota’s broad sales-tax base is “showing its true colors right now,” the man who oversees the department that collects state taxes said Thursday.

State Revenue Secretary Jim Terwilliger told the South Dakota Lottery Commission that state government’s fiscal year ended June 30 in better shape than had been expected back in March, when COVID-19 swept in.

Terwilliger said the coronavirus pandemic created fear about what would happen to state government’s revenue stream. But the latest numbers showed two “really strong months” of sales tax receipts, with 10% growth in July over the similar month last year and a 6.7% gain for August, he said.

That came in the wake of the sales tax under-performing the two previous months, with May receipts losing ground 1% from the previous year and June up 2.7%.

Contractor excise tax meanwhile is running 5.6% ahead of the Legislature’s estimate through July and August, according to Terwilliger. He acknowledged that federal COVID-19 aid stimulated economic activity in South Dakota during the pandemic.

Lottery Commission member Jamie Huizenga of Pierre thanked Governor Kristi Noem “for her leadership in this challenging time.”

“As a state we’re doing fine,” Huizenga said, noting South Dakota’s “general business climate is better than many states in the country.”

Norm Lingle, the lottery’s executive director, said video lottery finished the 2020 fiscal year at a record level, despite thousands of machines temporarily shutting down during the depth of the pandemic, transferring $116.4 million as state government’s 49.5% share from the privately-owned terminals. That was about 2% more than 2019, he said: “I think that is a huge accomplishment.”

Lingle told the commission that instant scratch-off tickets generated about $4.4 million net for state government, in part because they’re sold at many businesses that stayed open during the pandemic, while lotto sales transferred about $7.1 million despite having no large Powerball jackpots.

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