Rhoden Map Shows Home Tax Savings Less Than 25% in Most Counties, Doesn’t Calculate Higher Sales Tax

I’ve estimated that Senate Bill 96, Governor Larry Rhoden’s half-hearted plan to allow counties to charge a 0.5% sales tax to lower property taxes, would at best lower homeowners’ property taxes by 25%, since it only affects county levies and not the taxes imposed by school districts, towns, and other taxing subdivisions.

Governor Rhoden’s new SB 96 savings map indicates I was being generous. A 0.5% sales tax would cut homeowner property taxes by 25% or more in only seven counties. Another eight counties would be able to cut homeowner property taxes by over 20%:

• 35%: Dewey
• 32%: Bennett
• 29%: Oglala Lakota
• 27%: Grant
• 25%: Charles Mix, Mellette, Tripp
• 23%: Brookings, Codington, Davison, Gregory
• 22%: Pennington, Hughes
• 21%: Lawrence, Faulk

Minnehaha, Buffalo, Harding, and Ziebach reach 20% lower homeowner property taxes; everyone else is below that. The lowest SB 96 savings are 8% in Hyde and Spink.

Governor Rhoden has portrayed his county-optional plan as superior to other (now mostly failed) Legislative proposals because one-size-fits-all statewide proposals don’t make sense because property values aren’t skyrocketing as much in some counties as others. Yet Rhoden’s map suffers from a little one-size-fits-all-itis: it shows savings on a $325,000 home in each county. $325,000 is the median home price statewide according to Redfin. But the National Association of Realtors finds that median home values are lower than that in most counties in South Dakota, going below $100,000 in Corson, Dewey, McPherson, Campbell, Todd, and Mellette. So 25% savings on home property taxes in White River and Wood won’t go as far in balancing out higher sales tax as 21% savings on a median-priced $343,503 home’s property taxes in Spearfish or Whitewood.

The Governor’s map also doesn’t attempt to answer that question of how much more homeowners will pay in sales tax. But the Executive Branch maintains that property tax savings will be greater than increased sales tax burden, thanks to visitors’ contributions:

Asked how much more a household might pay in sales tax under the plan, Rhoden said he did not have an estimate. But his administration argued it is not a “zero-sum game” because visitors would also pay the sales tax.

Budget commissioner Jim Terwilliger said he ran the numbers for his own household.

“I’ve kind of figured it about a hundred and sixty dollars roughly an additional sales tax over the course of a year,” Terwilliger said. “And if you look at the statewide average each county is a little bit different but on average it’s about six hundred and sixty dollars you’re saving on the property tax plan.”

Terwilliger said that works out to “net savings” for homeowners “of you know approximately five hundred dollars give or take depending on what County you’re in” [Todd Epp, “New Map Shows Potential Homeowner Savings Under Rhoden Property Tax Plan,” KXLG Radio, 2026.02.27].

Save $660, pay only $160 extra… I’m still having trouble believing that a 0.5% sales tax is going to add up to that much in savings and that visitors are going to foot 75% of the bill. In the case of a county sales tax, “visitors” includes South Dakotans from other counties. If Minnehaha and Davison Counties adopt the SB 96 tax and Miner County doesn’t (because there aren’t a lot of sales to tax in Miner County), then folks from Howard will end up paying more taxes every time they go to Sioux Falls or Mitchell for groceries or building materials, just to lower big-town homeowners’ taxes.

And since SB 96 mandates a percentage decrease in levies applied equally to all properties, each owner of a million-dollar house in a county collecting SB 96 will get more of those visiting fellow South Dakotans’ dollars than will each owner of a median- or lower-priced house.

Governor Rhoden’s property tax savings map for Senate Bill 96 is a good start for explaining the impacts of his county sales tax proposal. But as House State Affairs takes up SB 96, its members should grapple with the more bigger picture of how SB 96 shifts tax burdens and to whom.