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House approves county-option gross receipts tax to offset property taxes

South Dakota House of Representatives · March 5, 2026
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Summary

Senate Bill 96 lets counties opt into a county-level sales-tax increment (up to 0.5%) to fund property-tax credits for owner-occupied homes; supporters argued it is local and voluntary, opponents warned of redistributional impacts favoring wealthier counties.

Representative Hughes introduced SB96 as a local-option tool allowing counties to enact up to a half-cent gross receipts tax to create a property-tax reduction fund credited to owner-occupied homes. Supporters emphasized local discretion, the need for new revenue to address rising assessed valuations and the bill's optional nature: counties would choose whether to adopt the tax.

Opponents framed the measure as a new tax and a redistribution that would benefit wealthier or tourist-heavy counties more than rural areas. Representative Mortonson argued it could shift tax burdens to rural residents to reduce property taxes in high-value counties. Floor debate included technical questions about online sales collection and distribution formulas; sponsor responses noted delivery address determines where online-sale taxes are assessed.

After extended exchange on equity, county control and implementation mechanics, the House voted to pass SB96. Lawmakers noted the proposal preserves local choice and will require county-level approval for any adoption.