Property Taxes

March 3, 2025
Seal SD Liberty

South Dakota’s 2-Year Plan to Say Goodbye to Property Taxes


Simplified, and easy-to-understand version of South Dakota’s plan to eliminate property taxes by replacing them with a Gross Receipts Tax (GRT). This version is tailored for the general population, emphasizing fairness, benefits, and protections against government overreach. I’ve also included an estimate of how this tax shift might affect different industries and regions in South Dakota.

South Dakota’s Plan to Say Goodbye to Property Taxes

Imagine never having to pay property taxes again—no more worrying about losing your home if times get tough. That’s what this plan does: it wipes out property taxes and replaces them with a small tax on business sales called a Gross Receipts Tax (GRT). It’s fair, simple, and keeps schools, roads, and local services running strong.

Why Get Rid of Property Taxes?

  • Protect Your Home: No one should lose their house because they can’t pay property taxes.
  • Make Taxes Fairer: Right now, only homeowners pay a big chunk of taxes. With GRT, businesses pitch in too.
  • Help South Dakota Grow: No property taxes mean more people building homes and businesses—more jobs, more opportunities.

What’s a Gross Receipts Tax (GRT)?

  • Easy Explanation: It’s a small 2.5% tax on what businesses make from sales (not profits).
  • Real-Life Example: If a store earns $100 selling stuff, it pays $2.50 in GRT. Small change, big impact.
  • Why It Works: It’s tiny, but since all businesses pay it, it adds up to replace the $1.6 billion we get from property taxes.

How Will This Help You?

  • No Property Tax Bills: Homeowners save money and stress.
  • Small Businesses Win: If a business makes less than $100,000 a year, it pays zero GRT.
  • Farmers Save: Farmers only pay on what they sell, not on seeds or tractors.
  • Schools & Services Stay Funded: The GRT keeps our communities strong.

How Will We Switch?

We won’t flip the switch overnight—it’ll take 3-5 years to ease into it:

  • Year 1: Cut property taxes by 25%, start a 1% GRT.
  • Year 2: Cut property taxes by 50%, raise GRT to 1.5%.
  • Year 3: Cut property taxes by 75%, GRT goes to 2%.
  • Year 4: Property taxes gone, GRT set at 2.5%.

Will This Raise Prices or Hurt Businesses?

  • Prices Stay Low: At just 2.5%, any price hikes should be small—like a few cents on a burger.
  • Businesses Benefit: No property taxes mean lower costs for factories, stores, and farms.
  • Small Businesses Protected: If you earn under $100,000, you’re off the hook.

How Does This Affect Different Jobs and Places?

Here’s a quick look at who wins with this shift:

Industries

  • Farmers: No taxes on land or barns—just a small tax on what you sell. More money stays in your pocket.
  • Construction & Factories: Save big by not paying property taxes on buildings or equipment.
  • Tourism (Hotels, Restaurants): Pay a little GRT on sales, but more visitors and new businesses could boost your bottom line.
  • Services (Doctors, Lawyers): A new small tax on your sales, but no property taxes could balance it out.

Regions

  • Cities (like Sioux Falls): Homeowners with pricey houses save the most since property taxes are higher here.
  • Rural Areas: Farmers and small-town folks get relief from land taxes and could see more local growth.
  • Small Towns: Businesses under $100,000 pay nothing, helping local shops thrive.

Keeping the Government in Check

We’ve added rock-solid rules so this tax doesn’t turn into a free-for-all:

  • Tax Locked at 2.5%: It can’t go up unless you vote yes in a statewide election.
  • No Sneaky Spending: GRT money only replaces property taxes—no new government splurges.
  • Extra Cash Back to You: If we collect too much, we’ll lower the GRT or send you a rebate.
  • You’ll See Everything: Every year, a public report shows where the money goes.
  • No Property Tax Comeback: Once it’s gone, it stays gone unless voters say otherwise.

Frequently Asked Questions

Q: Will I pay more overall?
A: Most homeowners will pay less or the same. Businesses cover the GRT, and price bumps should be tiny.

Q: What about schools and roads?
A: The GRT brings in the same $1.6 billion property taxes did—schools and services won’t miss a beat.

Q: Can businesses skip paying?
A: Nope. It’s based on sales, not profits, so it’s tough to dodge—and we’ll enforce it.

Q: Why not just cut property taxes a little?
A: Getting rid of them completely stops the risk of losing your home and makes taxes fairer for everyone.

What’s Next?

  • Check the Details: We’ll study how this hits different jobs and places to keep it fair.
  • Try It Out: Test the GRT in a few spots first to iron out kinks.
  • Your Vote Counts: This might need a big “yes” from South Dakotans—stay tuned!

Why This Rocks for South Dakota

This plan saves your home, spreads taxes fairly, and sets us up to grow—all while keeping the government on a tight leash. It’s a win for homeowners, farmers, small businesses, and our future. Let’s make it happen!