Legislative Bulletin
Issue Number 2 February 2, 2011
A proposal to eliminate the state tax on food has been rejected by the House Taxation Committee on a party-line vote of 11-4.
HOUSE BILL 1131 would have offset the drop in food tax dollars by raising the general sales and use tax rate to 4.35 percent.
SDRA joined the South Dakota bureau of Finance and Management and the South Dakota State Chamber of Commerce in opposing this bill.
Here are some of the arguments made for keeping the tax on food in place, and against passage of HB 1131:
* South Dakota has a broad tax system. Taxing allows the state to keep the overall rate low, and also helps the state imposing a personal or corporate income tax.
* The poorest people in the state are currently eligible for the sales tax on food refund program.
* In 2004 the voters of South Dakota voted overwhelmingly against a proposal to eliminate the tax on food.
* SDRA lobbyist Ron Olinger told the committee that the plan would do nothing to address the current state budget crisis, and would in fact hamper the ability of the Legislature to raise the state sales tax if they determined there is a crucial need for additional revenue.
We need to this extra penny sales tax more than ever before.
ReplyDeleteWe should also look at increasing the license and registration fees on vehicles, seems like that would be a good way to generate funding for safety, mass transit, and roadway improvements. We actually just payed $100 for the year, for two vehicles, seems insignificant at best.