PIERRE, S.D. (KELO) — Owner occupied homes would see a $425 property-tax credit under the latest proposal at the South Dakota Capitol.
That’s the approach the state Senate currently favors for a widespread tax cut, as shown by the 31-2 for it Thursday.
Senate Republican leader Casey Crabtree said it would provide about $104 million of tax relief.
That’s similar to the amount for a proposal from Republican Rep. Chris Karr to reduce the state sales tax rate to 4.2% from the current 4.5%.
The state House of Representatives has passed Karr’s plan.
The two chambers have four working days next week to reach a decision.
What’s clearly off the table, at this point, is eliminating or reducing the state sales tax on groceries.
Republican Governor Kristi Noem wanted to take the grocery tax rate to zero, but the House preferred Karr’s broader cut.
The Senate on Thursday rejected on a voice vote an attempt by Senate Democrat leader Reynold Nesiba to take the grocery-tax rate down to 2%.
“People want property tax relief,” Crabtree said, citing a poll done last summer. “The numbers really show us, we’ve got to offer property tax relief.”
Nesiba disagreed, noting that many people who live in his legislative district are renters who wouldn’t qualify for the refunds.
“This is really a tax shift,” he said. “It seems like a terrible idea.”
Republican Sen. Mike Diedrich said tax burden comes in many forms in South Dakota. “This addresses the issue in another way,” he said.
Looking to next week, Diedrich added, “We need to keep the dialogue going, without any further amendments, without any further ado.”