SIOUX FALLS, S.D. (KELO) — The opposition’s arguments against Initiated Measure 28 are hypothetical scenarios used as scare tactics, Rick Weiland, the sponsor of IM28 said in a news conference on Tuesday.
IM28 is an initiated measure prohibiting taxes on anything sold for human consumption, which includes groceries. “This initiated measure prohibits the State from collecting sales or use tax on anything sold for human consumption” according notes on the ballot measure.
The intent of IM28 is to remove the state sales tax on groceries, Weiland said.
Weiland’s news conference was a direct attack on the group South Dakotans Against an Income Tax, which opposes IM28.
Weiland said he giggles each time the opposition group says that IM28 is “setting us up for an income tax.”
“That is a fear-based argument and not a fact,” Weiland said.
“We are not using scare tactics,” Nathan Sanderson of the group called South Dakotans Against an Income Tax and executive director of the South Dakota Retailers Association said in a KELOLAND News interview.
The opposition group has exaggerated and improperly used a hypothetical scenario from the state’s joint committee on appropriations which says the state could lose $646 million in revenue if IM28 is approved, Weiland said.
The tactic is a “bold-faced lie,” Weiland said.
Sanderson points to the language of IM28 which he said supports the argument that $646 million in revenue would be lost.
The words “human consumption” includes more than groceries, Sanderson said. The definition of tobacco, for example, cites it as an item for human consumption, Sanderson said. IM28, as written, would cut the state sales tax on tobacco, he said.
The state sales tax could also be cut on toilet paper and similar items for human consumption, which are part of the $646 million in lost revenue, opponents say.
Another point of contention between supporters and opponents is if municipalities would still be able to tax groceries.
State taxes vs. municipal taxes
Weiland said the opposition group says IM28 will kill towns because they won’t be able to collect sales tax on groceries.
“That is also a fear and not a fact,” Weiland said.
Sanderson said the South Dakota Municipal League’s legal opinion and the opinion of several city attorneys is that state law would not allow municipalities to have a law the state can’t have.
Supporters have legal opinions that say IM28 as a new, more specific law, would replace existing law, Weiland said. Also the ballot notes clearly state that municipalities would still be able to tax groceries, he said.
As to legal opinions from city attorneys who oppose IM28, those lawyers are wrong, Weiland said.
Ballot notes also say “Judicial or legislative clarification of the measure will be necessary,” Sanderson pointed out. He dismisses the “notion that we are using scare tactics” because opponents are pointing out the law and the language of IM28.
“We shouldn’t pass ballots that we know aren’t drafted right,” Sanderson said.
He questioned if IM28’s intent was to also remove the sales tax from tobacco since tobacco has been defined as an item for human consumption.
If IM28 supporters wanted to ensure that municipalities could still have a sales tax on groceries and limited the measure to food and food ingredients, why didn’t they use the language in Gov. Kristi Noem’s proposed measure, Sanderson said.
Noem proposed setting the state sales tax on groceries at 0% which would have allowed municipalities to tax those items, Sanderson said. Also, Noem’s proposal specified food and food ingredients, he said.
Weiland said the poorly written argument is used only because opponents don’t like IM28.
Noem had originally supported IM28, but pulled her support in March of 2023 because of concerns it could negatively impact the revenue from the tax on tobacco.
“This fear-based campaign of hypotheticals is not a reason to vote against IM28,” Weiland said.
In response to a KELOLAND News question as to what is the motivation of the opposition group, if as in Weiland’s opinion, it is using fear, not fact-based information, hypotheticals and scare tactics, he said, “I don’t really know.”
Lawmakers have been attempting to repeal the sales tax on groceries for 20 years, Weiland said.
He cited Noem’s failed attempt in 2023 to repeal what is called the grocery sales tax as one attempt and the public support for repealing the tax.
The time is right to remove the tax, Weiland said.
