PIERRE, S.D. (KELO) — The proposed reduction of South Dakota’s sales-tax rate to 4.2% has changed again while clearing another hurdle.

The Senate Appropriations Committee amended it Wednesday, then endorsed it 7-1.

Senate appropriators kept in place a two-year sunset that the Senate Taxation Committee attached Monday.

But appropriators decided that something known as the Partridge amendment should be permanently repealed.

The cut’s lead Senate sponsor, Republican Ryan Maher, requested that change.

The Partridge amendment was the key to the Legislature’s decision to raise the rate to 4.5% in 2016 from 4%. The additional revenue went to property-tax relief and K-12 salaries.

The Partridge amendment sought to gradually roll back the tax rate as state government collected more sales-tax revenue from remote sellers.

It has never been used.

The current proposal from Republican Rep. Chris Karr met no opposition Wednesday. HB-1137 will be up for debate by the full Senate next week.

If the Senate passes it in the current form, the bill would return to the House for a decision whether to agree with the Senate version.

The House meanwhile amended a Senate bill on Tuesday and inserted the wording of Karr’s bill as it had left the House. That version doesn’t have the two-year sunset. The Senate also will consider that version next week.

Republican Sen. Bryan Breitling called for appropriators to endorse Karr’s bill on Wednesday. “The sunset doesn’t mean there is going to be a tax increase in two years. It simply means it’s an opportunity to re-evaluate,” Breitling said.

Two major business groups supported Karr’s approach.

“We think this is a good step to move forward at this time,” said Nathan Sanderson, executive director for the South Dakota Retailers Association. “We’re certainly fine with the sunset provision if that’s what this body determines to do, and recognize that reconciliation will need to happen on the other (House) side.”

“By reducing the overall rate, you provide a tax break to business. Manufacturers, big banks, hospital systems buy items that are taxed — sandpaper, paper towels, that kind of stuff,” said David Owen, president for the South Dakota Chamber of Commerce and Industry. “Where the grocery proposal would not expand to the business community, this one does.”

Karr said the tax revenue that wouldn’t be collected isn’t part of state government’s 2024 plan. “We’ve not spent or allocated these dollars. They’re not part of the budget — yet. So the only people we’re taking these dollars from is the taxpayers at this time,” Karr said.

The official estimate is that it would remove $103.8 million from state government’s revenue.

Republican Sen. John Wiik was lead Senate sponsor of the governor’s proposal to eliminate the state sales tax on groceries. It was killed by the House Appropriations Committee, on which Karr serves.

“Yes, that was my bill, and it was a, it was a large component of what the governor ran on for her re-election,” said Wiik, who in January was chosen as the new chairman for the South Dakota Republican Party. “I think the fact that this did not even make it past its first committee hearing was an injustice of this session, and I really think this deserved more discussion in the Senate than it received.”

Wiik said he would “for now” support Karr’s bill. “But I just want it on the record to know there was another very, very good, very resounding, publicly supported tax relief package out there.” He said the reason for the sunset is that South Dakota voters could “very well pass” a ballot measure in 2024 that would eliminate the sales tax on groceries — “And we’ll be dealing with that in two years.”

Republican Sen. Jim Bolin cast the vote against Karr’s proposal. “Where I live in Lincoln County, the big thing is property taxes,” Bolin said. “By far the people talk about, talk to me about. I don’t think this is the right way to go. I much prefer a property tax proposal that was brought forward by the summer study on that issue.”

The House appropriators killed the property-tax proposal, too.

Maher said the broader approach from Karr’s cut could help people in more ways.

“You go out and buy a $400,000 piece of equipment that you see that happens across rural South Dakota, you’re looking at about a $1,200 savings just in sales taxes with this proposal, which then could go in paying or offset some of those property taxes,” Maher said. “It’s essentially from this pocket to that pocket, but it’s still savings for the average South Dakotan.”