Legislators began taking testimony on a bill that would remove the state sales tax on food yesterday
SB164 Would remove the current 4.2% sales tax on food and reimpose the 0.3% general sales tax cut passed last session on most other goods and services.
Proponents say the bill is revenue neutral.
The sponsor, Democratic Sen. Reynold Nesiba of Sioux Falls, says he has been working on eliminating the sales tax on food for 20 years. He said his bill gives the legislature control over the sales tax removal, rather than having the voters take it into their hands this November.
Citizen advocate Cathy Brechtelsbauer of Sioux Falls said the bill would help lower costs at nursing homes, as they must purchase considerable amounts of food to feed their residents.
Another Sioux Falls resident, John Cunningham, said the current 0.3% reduction in the overall sales tax helps out-of-state tourists more than South Dakotans. He noted that it costs South Dakota about $38 million a year. Eliminating the sales tax on food, he said, would benefit South Dakotans.
As the committee was running out of time, it will consider more proponent and opponent testimony on Friday on SB164 and SJR510, which would put removing the sales tax on food on the ballot.