Whoever’s mad about high property taxes apparently isn’t mad enough to get the Legislature to take action. The only big property tax bill left standing appears to be Governor Larry Rhoden’s wimpy Senate Bill 96, which passes the buck to counties by letting them impose a half-percent sales tax for the exclusive purpose of offsetting property tax reductions. SB 96 creaked through the Senate Monday on a 20–14 vote, but only after rookie Senator Joy Hohn (R-9/Hartford) amended the bill to clarify that counties cannot prevent residents from referring newly passed sales tax ordinance to a public vote.
SB 96 is remarkable in reversing the Legislature’s long-standing aversion to giving the counties any additional taxing authority. But as a budget-neutral measure, SB 96 does nothing to help counties address budget shortfalls. As I noted in my read of the Governor’s fiscal estimate, a county sales tax would probably only knock down homeowners’ property taxes by 25%, since SB 96 won’t lower levies for schools, cities, and other taxing districts. The savings would be even less in counties like Turner, Clay, Custer, Fall River, McCook, and Marshall, where the Governor’s figures show a 0.5% county sales tax would fall well short of current property taxes on owner-occupied homes. And homeowners will pay a big chunk of their tax savings back to their counties at the local grocery and hardware stores.
But the Legislature can’t work up the courage to provide tax relief themselves and raise taxes to pay for it. Among the property/sales tax swaps they’ve nuked is House Bill 1308, rookie Representative Tim Czmowski’s (R-6/Sioux Falls) plan to zero levies on homes statewide and raise the sales tax to 5% to compensate local taxing districts and cover state budget items. Rep. Czmowski even got a fiscal note from the LRC saying that his figures worked out better than I thought, with the extra sales tax generating enough revenue to completely cover the lost property tax and ultimately leave over $63 million for the state to raise pay for state workers, school employees, and Medicaid providers. Unmoved, the House killed HB 1308 yesterday on a 24–42 vote.
Senator Taffy Howard (R-34/Rapid City) isn’t happy that the Legislature is passing the buck but not comprehensive statewide property tax reform:
Rapid City Republican Sen. Taffy Howard stood in the South Dakota Senate on Monday, saying she’d begrudgingly vote for authorizing counties to charge sales taxes.
“I’m not happy that we’re going to go back to our citizens and say, ‘Probably the only way we’re going to get property tax relief this year is through a new tax,’” Howard said. “I find that abhorrent” [Makenzie Huber, “County Sales Tax Emerges as Last Major Property Tax Reduction Proposal Standing in Legislature,” South Dakota Searchlight, 2026.02.24]
She’ll have a chance to test voters’ abhorrence in a few months as well. If the Legislature is misreading misread the electorate’s property-tax anger, Senator Howard should be able to rally like-minded property-tax slashers to primary the Republican balkers and come to Pierre in 2027 to take a real swipe at property taxes.
The problem with South Dakota’s tax system is the absence of an income tax on the wealthy and on corporations.
The old libertarian dictum holds that taxes are theft. Well if they are theft, South Dakota’s political class is stupid. They are robbing the wrong people. Willie Sutton had if figured out. He robbed banks because that’s where the money was. Well there’s not a lot of money in poor and middle class households or on small farms and in small businesses. The money is mostly at the top, in the upper income class in South Dakota, and it’s not taxed at the rates of the middle and lower classes.
South Dakota needs an income tax on the upper income households and on the larger corporations. You can structure it such that it doesn’t hit the lower income and higher income folks, give tax relief to middle class property owners and renters, and provide some relief on the sales tax. Through sharing revenue generated by an income tax with local governments the state can relieve some of the pressure on school districts and local governments for opt outs.
I don’t buy the libertarian philosophy. I think taxes are part of buying for the social contract that has been a part of the country’s history since the Mayflower landed. No one likes any tax they pay, so South Dakotans, like most Americans, gripe about it constantly. But there is a way to make the tax system fairer. Take it.
Mr. Pay, the libertarian philosophy is basically Republican but ok with smoking dope. Its what really broke them away. the Mary Janer party should be their name.
Fairness would be a good way to proceed. In this day of AI lets have some ideas. This drive to get rid of property taxes is strikingly stupid but has taken over Republicans everywhere. Sooo what’s fair for a start, that should be easy to get to right?
The lack of property tax relief will cost Gov. Rhoden any chance of getting elected to a new four year term.
he does not appear to have any passion for the job.
Absence of an income tax—amazing that, given all the frustration over property taxes, not one legislator has mentioned that obvious element of the problem.
How did the U.S. get along without an income tax until Wilson came along? Seems to me, it was devised to finance war….and has been doing so as the largest part of our budget since. A negative way to spend hard earned money. They need to look for fraud in the military with their $1000 toilets. And curb the spending of the oligarchs now in office.
I guess I wouldn’t mind paying my fair share for some services. However, many of those services are being cut, gutted, or destroyed. I want a decrease in my taxes for what’s being lost. And I have no input.
I feel somewhat like an ancestor of mine who was involved in the American Revolution; he too was tired of paying for taxes without a say or representation.
P.S. If our system was fair, it would be acceptable. It’s not and that’s why we have more billionaires living in the U.S. than anywhere else. I read that 47 live in California. Becoming corporate feudalism.