Two bills modifying the Bank Franchise tax (BFT) are not expected to change the percentage of revenue distribution provided to South Dakota counties. School districts located within a county receiving the revenue are allocated a percentage.
Senate Bill 56 defines a credit card bank (think Citibank) and sets the revenue split for the BFT for a credit card bank at 95 percent for state and five percent distributed to the county. The disparity in the split is because revenue received by the credit card bank is nationally collected. BFT collected from community banks is split approximately 73 percent for county and 26 percent for state.
Senate State Affairs committee passed SB 56 at Wednesday’s committee meeting and approved its placement on the Senate consent calendar.
House Bill 1045 sets a tax rate of six percent for income earned by a bank or credit card bank as part of the BFT. HB 1045 was assigned to the House State Affairs committee, but does not have a hearing scheduled yet.
The bills were introduced as a follow up to changes made during the 2012 session to South Dakota law under Chapter 10-43 the Income Tax on Banks and Financial Corporations.
“We don’t anticipate any changes to the distribution of funds, but we’ll continue to monitor their progress,” Executive Director Wade Pogany said.
For updates on the bill check the ASBSD blog and Bill Tracker.
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