OPPOSE SB135 – Giving cities the power to raise taxes

• Sales tax is the most regressive tax we have, meaning the lower-incomes are burdened more, and upper incomes are affected less.

• Sales tax takes food off tables in South Dakota. In families with limited budgets, food is often the flexible part of the budget, and the tax takes food away. Think about how much 6% tax takes out of a $20 bill. (Many low-income household do NOT get food stamps. Many others receive only partial allotments of food stamps and must buy some food with cash.)

• Already at 6% (4% state + 2% city) the total sales tax you pay on food over a year is equivalent to 3 weeks worth of food. A new 1% would add another half a week to that problem.   (.07×52 weeks = 3.65 weeks)

• At one time SD had a strict limit for city sales tax on groceries. But this limit was taken off, and over the past decade SD cities have raised their tax on food from 1% to 2%. By doing this, they already received an increase in sales tax revenue that they continue to reap every year.

(FYI- Background info: Under the “streamlining rules,” city sales tax may not be lower on some things than other things. Thus, we cannot go back to the previous 1% limit on food for cities. However, states are allowed to have lower rates on food and utilities, even zero, which we hope will be accomplished with HB1193.)