SIOUX FALLS, S.D. (KELO) — A new report from the South Dakota Municipal League says the measure to repeal the state’s sales tax on groceries could cost cities and towns tens of millions of dollars.
The league’s report says Initiated Measure 28 would cause local governments to lose at least $51 1/2 million in sales tax revenue each year.
Supporters say IM-28 is an effort to repeal the state’s 4.2% sales tax on groceries.
Opponents says the measure’s vague wording could eliminate the tax on quote “anything sold for human consumption, not including alcoholic beverages or prepared food.”
In a news release, the SDML said smaller towns like Roslyn, Tulare, White River and Wolsey would see losses above 40 percent. The highest estimated loss would occur in Bonesteel with a 59 percent reduction.
“IM-28 would be a disaster for cities and towns,” said Harry Weller, Mayor of Kadoka and Municipal League President. “In my town of Kadoka, we’ll lose at least 24 percent of our sales tax revenue. Local governments run on lean budgets as it is. If IM-28 passes and we’re barred from collecting sales tax, we’ll have no choice but to increase property taxes.”
