A campaign group has launched a referendum to repeal a new South Dakota law that directs revenue from an expiring sales tax cut toward property tax relief for homeowners.
Senate Bill 245 would use an estimated $110 million in future sales tax revenue, along with $56 million from the state’s general fund, to lower property taxes tied to public education. The sales tax rate, reduced to 4.2% in 2023, is scheduled to return to 4.5% next year regardless of the referendum’s outcome.
Ned Horsted, chair of South Dakotans for Fair Taxes, argues the measure unfairly benefits homeowners—particularly wealthier ones—while renters and non-homeowners see no direct relief. Horsted called the law a “wealth transfer” and said his group has 59 days to collect more than 17,500 signatures to put the issue on the November ballot.
Gov. Larry Rhoden countered that repealing the law would eliminate what he called the largest property tax reduction in state history, noting sales taxes will rise regardless. If enough signatures are gathered, voters will decide whether to overturn the law this fall.
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