HB 1182: Sales tax increase bill passes Senate, signed by Gov.

You are here:

HB 1182: Sales tax increase bill passes Senate, signed by Gov.

A sigh of relief and well deserved celebration followed the clearing of the final legislative hurdle by the bill increasing the state’s sales tax by a half cent and that celebration continued through the final day of the 91st legislative session (3/11) when Gov. Dennis Daugaard signed the bill into law.


Senators broke the final barrier for Gov. Daugaard to sign House Bill 1182, which increases the state’s sales tax by a half cent and reduces property taxes, with their passage of the bill on a vote of 25-10.


The 25 “ayes” cleared the 2/3 threshold needed for HB 1182 to pass by two votes. House members passed the bill by a single vote, on its second opportunity.


The half-cent increase to the sales tax, which has not been raised since 1969, is projected to generate more than $60 million in new revenue next year for school districts to put towards raising teacher salaries and would provide $34 million in property tax relief.


Most importantly, the increase provides much needed sustainability to education funding.


“We just can’t tinker with our education system anymore,” Sen. Deb Soholt, Co-Chair of the Blue Ribbon Task Force, said.


“There are historic moments in time where you have to step out into unfamiliar territory.”


Throughout the debate on HB 1182, opponents continued to call for review of the current budget to find dollars to fund increases to teacher pay in place of passing the increase to the state’s sales tax.


Several legislative appropriators rebuffed the idea, with Sen. Deb Peters, Chair of the Appropriations Committee, noting during the bill’s debate on the Senate floor that “there isn’t the money available to be pulling out” of the state’s budget.


Sen. David Novstrup introduced two amendments to the bill – one only raising the sales tax by a quarter cent and the other by 3/10 of a cent – that would have required approximately $10-15 million in additional funding from the budget to reach the desired funding goal. The amendment also would have removed the property tax relief component of the bill.


Sen. Peters said added, ongoing revenue was “not there” in either amendment.


“We’re looking for ongoing, sustainable revenue,” Sen. Peters said.


Each amendment was defeated, which paved the way for the final vote.


“This will truly be a victory for South Dakota,” Sen. Billie Sutton said. “Everybody is watching and it is time for a victory.”

Scroll to Top