SIOUX FALLS, S.D. (KELO) — Governor Kristi Noem isn’t giving up on a tax cut on groceries in South Dakota. Lawmakers in Pierre rejected the plan and came up with one of their own that impacts the general sales tax.

South Dakota is one of 7 states where you pay taxes when you buy food at the store. Governor Noem tells KELOLAND News that she is still hopeful state lawmakers will come around on a permanent tax cut on groceries.

“I do not understand why the legislature is not doing it. Why they won’t give the people what they want. In spite of the fact that the alternative tax cut that they are looking at is the same amount of revenue, it just benefits out of staters more than South Dakotans,” said Noem.

Lawmakers are considering multiple bills reducing South Dakota’s sales tax from 4.5 percent to 4.2 percent. But Noem says they still have time to change course and bring back her tax cut on groceries.

“They still should, the last couple weeks of the session, look at removing the tax on groceries.

Tom Hanson: Can you clarify, was there a threat of a veto for the current?

“I don’t think that anybody should ever take for granted that I will just automatically sign a budget. I think it is still that they think in two weeks I have to sign that budget if I don’t like it
I have a constitutional requirement to approve of whatever budget they present to me, and I’ve got time to make sure that it is right,” said Noem.

Noem says it would be impossible for her to come out against an initiated measure in the next election that would repeal the food tax. She just thinks it should be done now by lawmakers, not later by voters.

“If they choose a different tax cut this year, they better make sure they can afford to do the repeal, the sales tax on groceries, in a couple of years too because they are going to have to do both,” said Noem.

The 2023 legislative session ends one week from today, with Veto Day on March 27th. If Noem were to reject the budget from the legislature, lawmakers may have the votes to override a veto.
The legislature is also considering a bill that would reduce property taxes.