Correction: a previous version quoted Rep. Linda Duba as saying 4%. She said 4.5%; this has been corrected below.
PIERRE, S.D. (KELO) — After championing a repeal of the state sales tax on groceries during her reelection campaign, South Dakota Gov. Kristi Noem on Tuesday urged members of the House Committee on Appropriations to support House Bill 1075, legislation which would bring that tax to 0%.
“We looked at adjustments in property taxes,” Noem said. “We looked at all other exemptions that we have in our state statute and recognized the one that would help this state the most and the people that live here and treat everybody fairly is eliminating the sales tax on groceries.”
The South Dakota Legislative Research Council says cutting the tax would mean a loss of roughly $115 million in state sales tax revenue per year. David Reiss, executive director of the South Dakota Municipal League, pointed out that cities also have a sales tax, which applies to groceries, too.
“It does require South Dakota municipalities to defend their ability to impose municipal sales tax on food and food ingredients now and in future initiated measure attempts,” Reiss said.
“There’s a million excuses you’ll hear today to kill this bill, and I can only think of about 900,000 reasons to make a due pass motion, and those are the nearly 900,000 South Dakotans who are not in this room,” said Republican Sen. John Wiik, the prime sponsor of the bill in the Senate.
The House Committee on Appropriations features 9 lawmakers: 8 Republicans and 1 Democrat. But the larger Republican caucus was in the spotlight Tuesday morning, too.
“I understand that you maybe have taken a caucus position,” Noem said.
Republican Rep. Mike Derby, who chairs the committee, confirmed that.
“The caucus did take a position,” Derby said.
In the end, the committee killed the bill. 7 of its 8 Republicans joined Rep. Linda Duba, its lone Democrat, in voting to do so. Only Republican Rep. John Mills voted against killing it.
“I would like to see us stairstep it down over time, or start with a small amount,” Duba said. “But I know that’s not possible. We’ve said we’re going to do 4.5%. I’m not willing to do that.”
An attempt known as a “smoke-out” to revive HB 1075 failed Tuesday afternoon on the House floor. That would have needed the backing of at least 24 of the chamber’s 70 members, but it didn’t have enough support.
Bob Mercer and Eric Mayer contributed to this report.