If Republicans reject the latest Democratic proposal to eliminate South Dakota’s unusual sales tax on food, maybe they’ll at least support a tax break for certain locally produced groceries.
Senator Red Dawn Foster (D-27/Pine Ridge) proposes Senate Bill 141, which would exempt “fresh seasonal fruits and vegetables, meat, eggs, dairy, baked goods, flowers, or artisanal products” sold directly to consumers at farmers markets. The bill doesn’t define “artisanal products”, but I assume that could encompass food products like jam and honey as well as craftier items like candles, soap, potholders, shawls….
The only reason I can think of for any legislator on Senate Taxation (which hears SB 141 tomorrow) is that the bill offers no mechanism to replace the sales tax revenue we would lose from farmers markets. That revenue may not be much: 12 years ago, the state Department of Agriculture reported that farmers market vendors sold $1.3 million worth of products in 2013. Assume a tripling of farmers market activity since then, and 4.2% sales tax on $4 million in sales would be a measly $168,000, which could be offset by spillover effects: encouraging people to buy more food at farmers markets supports local producers, who will plow more of their money into the local economy, raising sales tax revenues in other areas.
Interestingly, Senator Foster’s four co-sponsors are all Republicans. We should be encouraged to see support from that side of the aisle for any form of food tax repeal.