Senate, House stalled on sales tax cut negotiations

SIOUX FALLS, S.D. (Dakota News Now) - There was gridlock at the South Dakota statehouse on Wednesday, with lawmakers unable to agree on a sales tax cut.

Members from each legislative chamber attempted to hash out a deal that balanced the concerns of each, but negotiations seem to be stalling in the eleventh hour.

The house wants a permanent tax cut, but the state senate is more cautious. It’s an impasse that may not be bridged before the session ends Thursday.

This is despite the efforts of a “conference committee” made up of three members from each chamber trying to hash out the differences between the two chambers.

The senate brought four different proposals forward over multiple meetings Wednesday, all of them including a sunset clause except the last one.

“Comparing one fiscal year to the next, and if there is a reduction in taxes by one percent, this would go into effect the next July to trigger a sales tax increase if our revenues drop,” said Senator Ryan Maher.

That proposal functions as a “trigger law”.

The senate has continually raised concerns about cutting taxes with looming future concerns, notably a potential ballot initiative to cut the grocery tax, Medicaid expansion implementation and a possible recession.

Representative Chris Karr has been leading the house side in negotiations.

“We have been over collecting (taxes) it is time to give the surplus money back to the people,” said Karr. “And I think we can do it responsibly, cutting taxes at about that one hundred million dollar mark.”

Karr has been advocating for the sales tax cut for years. He feels that while the state could do 0.5 percent, he has no concerns about the house’s proposed 0.3 percent cut with no sunset clause.

”If something major happens economically, is that the best time to raise taxes on the people of South Dakota? Automatically? No, there needs to be a thought process, we need to be able to come back here as elected officials and address this, like we are elected to do,” said Karr.

The conference committee will reconvene Thursday at 8:00 a.m. to debate Maher’s proposal.

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