Voters in two South Dakota counties reject local sales taxes for property tax reductions

Voters in South Dakota’s Brown and Codington counties rejected new half-percent county sales taxes Tuesday, voting down plans their county commissions had proposed to lower homeowners’ property taxes.

Brown and Codington were the first counties where voters weighed in on the new taxes. The decisions come after a string of county commissions approved local sales taxes for homeowner property tax reductions. At least seven other counties have adopted a sales tax without putting it to voters or being subjected to a referendum.

State lawmakers and Gov. Larry Rhoden gave counties the authority during this year’s legislative session to implement their own sales taxes for the first time in state history, with proceeds going toward lowering homeowners’ property taxes. Counties are limited to a half-percent tax. Lawmakers and the governor also decided to use proceeds from next year’s increase in the state sales tax rate, from 4.2% to 4.5%, to reduce property taxes for homeowners statewide. 

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Brown County commissioners chose to put the tax on the ballot, while Codington County residents gathered petition signatures to force a vote. In Brown County, 56% of voters opposed the tax. In Codington County, 60% did, according to unofficial results from the Secretary of State’s Office.

Shelly Alvine, a Codington County resident, helped lead the petition drive and called the result a “nice outcome.”

Alvine said voters were “voting with their pocketbook” as inflation strains household budgets, and she called the rejection “decisive.” Renters, she added, wouldn’t have benefited from lower property taxes while paying higher sales taxes.

“If you could look a person in the eye and ask them for $50 to pay for your property tax, that’s what you’re asking them to do with this sales tax,” Alvine said.

Alvine said the results should give other counties reason to pause before pursuing their own sales taxes. Voters in Clay and Charles Mix counties will decide on theirs in special elections Nov. 17.

“I think that’s a good reason for the Legislature, before passing off their decisions on South Dakotans and the counties, to look for other ways to make property tax relief more equitable,” Alvine said.

Rhoden’s office sent a statement in response to South Dakota Searchlight questions about the county results.

“My plan to cut property taxes empowers South Dakotans to choose what works best for their county,” Rhoden said. “And people in different counties will make different choices — that’s why we left all options open to refer and initiate these measures.”