South Dakota’s plan to raise sales taxes in order to ease property taxes will shift more of the state’s tax burden onto lower‑income residents. That’s according to Republican Senate Majority Leader Jim Mehlhaff, who says the move is “regressive,” but still necessary to provide relief from rising property taxes.
Under a new law signed this month, the state sales tax will increase from 4.2 to 4.5 percent next year, generating an estimated 114 million dollars. A separate law allows counties to add a half‑cent sales tax to offset homeowner property taxes.
Supporters say the change will help counties—especially in tourist areas—collect more revenue from visitors. Critics argue the shift will hit lower‑ and middle‑income families hardest, since they spend a larger share of their income on taxable goods.
Several Republican‑led states are considering similar moves, broadening or raising sales taxes to pay for income‑ or property‑tax cuts. Opponents warn that the long‑term effect could be higher costs for everyday residents and reduced funding for public services.
