SIOUX FALLS S.D. (KELO) — Sales tax numbers continue to lag across South Dakota.
During Wednesday’s Joint Committee on Appropriations, officials told state lawmakers the state’s current revenue trends of the first quarter of fiscal year are coming up short compared the previous year.
Derek Johnson, State Economist for the Bureau of Finance & Management, said the sales tax numbers are behind what lawmakers predicted for sales tax growth in February.
“The legislature adopted growth of about 3% from FY 2024 to 2025 and we finished FY 2024 down about $9 million in sales tax collections,” Johnson said. “Year-to-date sales tax collections are actually down year over year and they are currently missing that estimate by 4.2%.”
According to the JCA Revenue Update, sales tax growth year-to-date is negative $18.8 million (3.5%) compared to this time last year. The total general fund revenue is also down from last year with more that $41 million (4.5%) less than the previous year.
Johnson said they are seeing areas like building materials, hardware, garden supply, home, furniture and furnishings, durable goods, communications and farm equipment are all down in terms of sales tax.
For FY 2025 July, sales tax revenue dropped 5.9% compared to FY 2024. Four months into the 2025 FY, sales tax revenue decreased 1.7% year-to-date compared to FY 2024.
Johnson added that through the first four months of FY 2025, its estimated that it’s down around 20.2% from FY 2024 in terms of farming equipment.
When asked if they were heading for a deficit Johnson responded it looks like those figures are going to be down.
“Unclaimed property could certainly make up a lot of that ground and more in terms of just looking at the one time budget for FY 2025 based on information we received about remittances, but certainly our two largest revenue categories, sales and use tax and contractors excise tax appear that they’re going to be down from where they were adopted by the legislature,” said Johnson.
Gov. Kristi Noem will present her FY 2025 budget address on December 3.
