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South DakotaSB 96101st South Dakota Legislature (2026)SenateWALLET

authorize the imposition of a county option gross receipts tax to reduce owner-occupied property taxes.

Sponsored By: Sponsor information unavailable

Signed by Governor

CountiesProperty TaxRetail Sales and Service TaxTaxation

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 3 benefits, 0 costs, 2 mixed.

County sales tax funds homeowner tax relief

Counties can adopt a gross receipts tax of up to 0.5% on goods, electronic products, and services already subject to state sales or use tax. Taxable purchases may cost more, while the revenue funds credits against the county portion of property taxes. Owner-occupied properties receive the same percentage credit first. Only after their county tax levy is fully covered can agricultural and other properties receive equal-percentage credits. Counties must place the revenue in a property tax reduction fund. County setup costs are capped at 2% of fund deposits in the first tax year and $20,000 yearly afterward. The state collects the tax and sends counties the balance within 30 days after collection, after refunds and collection and administrative costs. Taxpayers follow existing state sales tax return, payment, assessment, and penalty rules.

Property tax bills show credits clearly

For taxes payable in 2028 and later, written property tax bills must show any credit funded by the county tax. Bills must also show taxes by taxing district and mark local decisions to exceed tax increase limits. The required notice reads: “INDICATES A LOCAL DECISION TO OPT OUT OF THE TAX LIMITATION.” Taxpayers can request a levy sheet when the breakdown is missing; the state revenue department sets a uniform notice form. When receipts are not mailed automatically, the bill or notice must say a receipt is available only on request.

Businesses can separate taxes from receipts

Businesses exclude covered state and county taxes from taxable gross receipts when those taxes are listed separately. The taxes must appear separately on an invoice, bill of sale, or similar document given to the buyer. Contractors can also list contractor excise taxes and applicable use taxes, including the county tax, separately on contracts and bills. Those amounts remain part of the total bill and can be collected from public and private buyers. Listing them separately does not itself reduce the total charge.

Older construction contracts avoid new county taxes

Counties cannot apply a new or increased gross receipts tax to materials incorporated into construction under qualifying contracts. The contract must have been bid or entered into on or before the tax's effective date. This protection covers only materials incorporated into work under that contract, not every purchase by the contractor.

County tax starts follow set dates

County tax ordinances and rate changes take effect only on January 1 or July 1. The start date is the first of those dates at least 90 days after notice to the state revenue department. Counties must send written notice and the ordinance by registered or certified mail after enactment or voter approval. Voters can refer an adopted ordinance to a public vote or initiate an ordinance; a suspended ordinance requires voter approval. These ordinances cannot take immediate effect as emergency measures, delaying both new taxes and the revenue for property tax credits.

Sponsors & Cosponsors

Sponsors

There is no primary sponsor on record.

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 87 • No: 34

House vote • 3/5/2026

Do Pass Amended

Yes: 48 • No: 19

House vote • 3/4/2026

Do Pass

Yes: 12 • No: 1

Senate vote • 2/23/2026

Do Pass Amended

Yes: 20 • No: 14

Senate vote • 2/18/2026

Do Pass

Yes: 7 • No: 0

Actions Timeline

  1. Signed by the Governor

    3/30/2026Senate

  2. Delivered to the Governor

    3/11/2026Senate

  3. Signed by the Speaker

    3/10/2026House

  4. Signed by the President

    3/9/2026Senate

  5. Do Pass Amended

    3/5/2026House

  6. Do Pass

    3/4/2026House

  7. Scheduled for hearing

    3/4/2026House

  8. Referred to

    2/25/2026House

  9. First Reading House

    2/24/2026House

  10. Do Pass Amended

    2/23/2026Senate

  11. Motion to amend

    2/23/2026Senate

  12. Deferred to another day

    2/20/2026Senate

  13. Do Pass

    2/18/2026Senate

  14. Scheduled for hearing

    2/18/2026Senate

  15. First read in Senate and referred to

    1/20/2026Senate

Bill Text

  • Introduced

    1/16/2026

    PDF

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