SD sales tax increases for the first time in almost 50 years

Published: Jun. 1, 2016 at 10:23 PM CDT
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You may have noticed a small change at the bottom of your receipt Wednesday.

The state sales tax went up.

It’s the first time sales tax has increased in South Dakota since 1969.

Lawmakers voted in favor as part of Governor Daugaard’s plan to increase average teacher pay statewide.

It’s a half penny or a half percent sales tax increase.

During the legislative session, deciding whether to increase sales tax was a hotly debated topic among lawmakers.

But Wednesday arguments against the tax seemed to fizzle, as many people didn’t even notice the increase.

As people walked out of Sunshine Foods in Sioux Falls after purchasing groceries shoppers didn’t notice the increased sales tax that began Wednesday, not even Christopher Gamrak

“I haven’t noticed yet,” Gamrak said.

Wealth management specialist Craig DeJager says he thinks that is going to be a trend across the state.

“I think it's pretty insignificant,” he said.

DeJager says the half cent tax won’t even add up much over time.

For example, he said if a Sioux Falls family buys a gallon of milk every week for a year at the price of $3.39 it would cost about $187.

With the new tax, the family would spend less than a dollar more a year on milk.

He says even on expensive purchases like buying a car, people aren't going to notice.

“They're not going to change their habits over the half cent sales tax,” DeJager stated.

He says there are other factors keeping the balance in South Dakotans' wallets.

Even though people are paying a higher sales tax, they’re also getting some major price breaks at the pump.

“Nationally we're still about 30 cents less per gallon than we were a year ago and I think that savings helps out for consumers in their everyday budget and should not impact them,” he said.

As for Garmak, he doesn’t like the thought of costs increasing.

“Everything's going up, I’m getting tired of it,” he said.

He says for teachers, the tax is a price he's willing to pay.

“Teachers deserve more money. That's what I think so I guess for that reason I’m alright with it,” he explained.

DeJager says the only group he sees affected by this tax increase is people who make less than 25 thousand dollars a year, but even then, he believes they will only have to make small adjustments.

While this went into effect Wednesday, teachers will have to wait just a little bit longer to see those bigger paychecks. The wage increase will begin July 1st.