A state lawmaker from Pennington County wants to change how South Dakota’s sales-tax rate would be reduced.
Senator Jeff Partridge successfully added language to the 2016 law that raised South Dakota’s rate to 4.5 percent for property-tax relief and higher pay for K-12 teachers.
The extra one-half percent was the first increase in the sales tax since 1969.
As a condition for the higher sales tax, Partridge wanted the tax rate gradually cut, as the state treasury gets more money from taxing more goods and services sold online.
For every $20 million of new revenue, the tax rate would go down one-tenth of a percent under the Rapid City Republican’s amendment.
That meant the rate would drop to 4.4 percent if South Dakota gets $20 million directly from remote sellers covered by another state law the Legislature passed in 2016.
That measure by then-Senator Deb Peters called for charging sales tax on goods and services sold to South Dakota customers by many businesses that don’t have a physical presence in South Dakota.
They are known as remote sellers.
The U.S. Supreme Court ruled last June in South Dakota’s favor that state governments could charge sales tax on remote sellers.
Governor Dennis Daugaard’s chief of staff told lawmakers after the Supreme Court decision there were questions that needed answers about how the Partridge amendment could take effect.
Partridge recently began circulating a proposal that he believes would clarify matters.
He wants to eliminate his original amendment that is in state law today.
That includes the automatic trigger — a one-tenth of a percent reduction for every $20 million of new online-tax revenue — that also would be repealed.
He said the trigger is confusing.
What Partridge now proposes is a different requirement.
He wants the state Department of Revenue to provide sales-tax statistics to the Legislature’s Joint Committee on Appropriations. That deadline would be day 21 of the annual legislative session.
He also wants to clarify how online revenue is calculated.
Those changes would let appropriators — nine from the Senate and nine from the House — set the annual revenue estimate and provide approval for any tax cut.
Governor Kristi Noem, who took office January 5, recently said she hasn’t seen an increase yet in online tax revenue.
Friday is the deadline for lawmakers to introduce unlimited legislation. The last day for a lawmaker to inroduce any legislation is January 30. The deadline for a committee to introduce legislation is January 31.