It's Time to Weigh In
It's time to weigh in
ALERT. Be prepared.
At long last! Opportunity Knocks to Cut Food Tax
If the Governor calls a special session this fall about rules for the new online sales tax, then we have a chance to switch a prescribed sales tax cut and make it a tax cut especially on food.
Current law says the new online tax revenue requires a rollback in sales tax: each new $20 million triggers a .1% sales tax cut. But slightly less revenue could take a whole 1% off food. There is no good estimate for food tax, so we could guess about $15 million for each 1% food tax. That would leave about $5 million with the state, which could appeal to some legislators.
Please read the article below to be informed, and help build momentum for this change. Please contact your state legislators. Ask them to switch the sales tax cut to be a cut in the food tax.
If there’s no special session, this plan will be a bill in the 2019 legislature. So all this fall you can talk with candidates for state legislature from your area. If you would prefer whole percents off the food, rather than tenths of percents off the general rate, let them know.
Finding your state legislators: Ask your county auditor, or go online to
Click on their names to get contact info: emails, phones, addresses.
Emails often look like this: firstname.lastname@example.org
Besides contacting state legislators, you can help raise voices to cut food tax: radio call-in programs, letters to newspapers, campaign events, . . .
We’ve worked for years to stop the taxing of groceries in South Dakota. This is the best opportunity yet.
Your voice is needed now. Thank you for your help.
Cathy Brechtelsbauer, coordinator, Bread for the World-South Dakota, 7/31/18
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GROCERY SHOPPERS PAID MORE FOR THEIR FOOD
TO MAKE POSSIBLE SD’S SUCCESS AT THE SUPREME COURT
For 14 years South Dakotans have been paying higher tax on their groceries in order to make it possible for South Dakota to win its tax case in the Supreme Court.
How did this happen? The preparation for the state to collect sales tax on online sales caused a significant hike in the food tax. It did not cause a tax increase on any other purchases, only food.
Before 2003, South Dakota cities had been limited to 1% tax on food. Then, tax “streamlining” rules were needed in order to position the state to tax online sales. The new rules said each city may have only one sales tax rate, even though the rules allowed the state itself to have a lower rate on food, even zero tax. Thus, cities’ food taxes rose from 1% to 2% in most South Dakota cities, rather than lowering the tax on other things to match the 1% on food. (Cities that had not been taxing food at all, such as Rapid City, Mitchell, Spearfish, Pierre, New Underwood, and Wentworth, were forced to start taxing groceries.)
In short, with higher food tax, South Dakotans pay more for every breakfast, lunch and dinner, now and for the past 14 years, to help win the Supreme Court tax case.
Back in 2003, some legislators said they would cut the food tax when the state finally receives tax from online sales. So the next legislature should recognize the contribution grocery shoppers have made to this Supreme Court success and make the next tax cut a cut in the food tax.
With cities still allowed only one tax rate, a food tax cut would need to be a reduction in the state’s portion of the sales tax.
Now, WHICH SALES TAX CUT WOULD YOU PREFER?
1/10% off the general tax rate? or 1% off food?
A sales tax cut is coming. In fact, the law requires one.
Background: Part of a 2016 law says that if the Supreme Court approves the collection of tax on online sales, as they just did, and if that tax revenue goes up at least $20 million, then one-tenth of a percent must come off the state's general sales tax rate. It’s the law.
Opportunity: The next legislature could switch the cut to make it a whole percent off groceries instead.
Now you know why it makes sense to direct the next tax cut to groceries.
• The yearly total a family pays in food tax could buy all of their groceries for over 3 weeks.
• Nursing homes pay tax on all of their food, which is a major budget expense.
• South Dakota is one of 5 states recognized as having the most unfair tax systems, with taxes proportion-ately harder on those least able to pay, easier on those most able to pay. The tax on food is the most regress-ive part of sales tax, because some pay a much bigger portion of their income for food than others.
• Only 6% of South Dakotan men and 12% of South Dakotan women eat enough fruits and vegetables.
• Most states do not tax food. A few have a lower rate on food. South Dakota loses tax as people shop across borders putting more than just food in their carts. This impedes economic development along our borders, especially the SE corner.
Tell candidates for SD state legislature: I’d prefer 1% off food to 1/10% off the general rate. When there’s going to be a sales tax cut, we should start phasing down the food tax.