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Brookings County commissioners weigh local gross-receipts tax under Senate Bill 96
Summary
County staff outlined Senate Bill 96, which would allow counties to impose up to a 0.5% local gross-receipts tax with revenues placed in a property tax reduction fund for owner-occupied credits; commissioners expressed caution and took no ordinance action.
The Brookings County Board of County Commissioners on June 22 heard an overview of Senate Bill 96 and related state tax changes, with county interim finance officer Jennifer Beller explaining how the measure would work and what it would fund. Beller said counties could impose a local gross-receipts tax up to 0.5% on tangible personal property, products transferred electronically and services, and that all receipts must be deposited in a property tax reduction fund to provide owner-occupied property tax credits.
Beller told the board counties may retain two percent of revenues in the initial year for administrative costs and up to $20,000 in subsequent years; if revenues exceed the amount needed to replace 100% of the county owner-occupied portion of property taxes, any remaining funds must be used to proportionally offset agricultural and nonagricultural property taxes. She also placed the proposal in state context, noting the state is increasing its share of education funding and that a sales tax holiday is scheduled to end in 2027, returning the sales tax to 4.5% with the additional 0.3% directed to homeowner property tax relief.
District 7 Senator Tim Reed, who spoke to the board, said he has tracked sales-tax trends for years and that "it raises about 3%-4% a year," expressing cautious support for local control while warning that "this really is a tax shift" between sales and property taxes. Commissioner Larry Jensen said he spoke with the director of equalization and that the director estimated "between 50%60% are owner-occupied," a figure the board discussed when weighing who would benefit.
Commissioners did not adopt an ordinance at the meeting. Several members said they wanted to learn how the proposal affected other counties before taking action; Commissioner Doug Post said he would not favor the tax because, in his view, it "shifts the tax burden to those who are just starting their life." The board left next steps open and heard staff explain drafting and petition options for an ordinance.
