📑 End Property Tax: GRT Plan – Technical Deep Dive for Experts
Executive Summary
The Core GRT Plan, part of the Maximum Liberty Plan (Plan 2), replaces all taxes and fees in South Dakota with a 5% Gross Receipts Tax (GRT), generating $3.6 billion in annual revenue to fund public services while eliminating property taxes. Locked in on April 20, 2025, this plan allocates $960 million for schools, $1.5 billion for local governments, and $1.14 billion for state services, with a $95.8 million surplus for rebates and projects. This white paper provides a detailed analysis of the plan’s revenue model, legal foundation, implementation timeline, economic impacts, and risk mitigation strategies, ensuring transparency for tax experts, analysts, media, and government reviewers.
1. Introduction
The Core GRT Plan aims to achieve maximum tax freedom for South Dakotans by consolidating all state taxes into a single 5% GRT, eliminating the $1.6 billion property tax burden and other fees ($2.097 billion sales tax, $628.2 million other fees). This section outlines the plan’s objectives, scope, and methodology for revenue verification and allocation.
2. Revenue Model and Verification
2.1 Revenue Calculation
- Business Revenue Base: $72 billion, derived from South Dakota’s $73.7 billion economy in 2023 (South Dakota Department of Revenue), adjusted for 2.3% annual growth to 2027.
- GRT Rate: 5%, applied uniformly to all business receipts.
- Total GRT Revenue: $72 billion × 0.05 = $3.6 billion.
2.2 Comparison to Current Taxes
- Sales Taxes: $2.097 billion (on $33.05 billion taxable sales, 2023 South Dakota Retailers Association data).
- Property Taxes: $1.6 billion (state-wide estimate, South Dakota Department of Revenue).
- Other Fees: $628.2 million (includes $125.4 million car tags, $2.8 million fishing licenses, $500 million fuel taxes).
- Total Current Revenue: $3.5042 billion.
- Surplus: $3.6 billion – $3.5042 billion = $95.8 million.
2.3 Verification Process
- Public Audits: Annual audits conducted by the South Dakota Department of Government Efficiency (SD-DOGE) ensure transparency.
- Citizen Oversight: A committee of South Dakotans reviews revenue allocation, ensuring compliance with the plan’s objectives.
3. Allocation of Funds
3.1 Breakdown
- Schools: $960 million (26.7% of revenue), allocated as follows:
- Urban Districts (e.g., Sioux Falls): $480 million.
- Rural Districts (e.g., Harding County): $480 million.
- Local Governments: $1.5 billion (41.7%), distributed by population share (e.g., Rapid City: $232.2 million, 6.45% of state population).
- State Services: $1.14 billion (31.7%), covering roads, healthcare, and public safety.
- Surplus: $95.8 million (2.7%), used for rebates and special projects.
3.2 Table: Revenue Allocation
| Sector | Amount ($M) | Percentage |
|---|---|---|
| Schools | 960 | 26.7% |
| Local Governments | 1,500 | 41.7% |
| State Services | 1,140 | 31.7% |
| Surplus | 95.8 | 2.7% |
4. Legal and Constitutional Analysis
4.1 South Dakota Constitution
- Article XI, Section 2: Permits the legislature to levy taxes for public purposes, provided they are uniform. The 5% GRT applies uniformly to all businesses, funding public services like education and infrastructure.
- Article III, Section 1: Requires voter approval for constitutional amendments. The plan includes a two-thirds voter approval requirement (approximately 606,000 out of 909,000 residents) to reinstate property taxes, ensuring democratic oversight.
4.2 U.S. Constitution
- 14th Amendment (Equal Protection): The GRT’s uniform rate ensures equal treatment, with exemptions (e.g., military, $4.78 million) justified by public policy goals.
- Article I, Section 8 (Commerce Clause): The GRT is a state tax on intrastate business revenue, not affecting interstate commerce.
5. Implementation Timeline and Risks
5.1 Timeline
- Signature Collection: April 19, 2025, to May 5, 2026 (target: 35,017 signatures).
- Ballot Placement: November 2026 general election.
- Effective Date: July 1, 2027, upon voter approval.
5.2 Risks and Mitigation
- Revenue Shortfall: Potential economic downturns could reduce the $72 billion base. Mitigation includes a $95.8 million surplus buffer and prioritized cuts to non-essential spending.
- Business Pushback: Some businesses may resist the 5% GRT. Mitigation includes exemptions for small businesses ($100,000 threshold) and property tax savings ($5,000–$50,000 per business).
6. Economic Impact Analysis
6.1 Sector Impacts
- Families: $3,000–$5,000 annual savings per household, increasing disposable income by $1.6 billion state-wide.
- Agriculture: Farmers pay GRT only on sales, saving $1.6 billion in property taxes, supporting South Dakota’s $10 billion agricultural sector (2023 data, South Dakota Department of Agriculture).
- Tourism: No property taxes and reduced visitor fees (e.g., state park entry fees eliminated, $1.5 million) boost the $4.96 billion tourism economy.
6.2 Table: Economic Benefits
| Sector | Annual Benefit ($M) | Impact |
|---|---|---|
| Families | 1,600 | Increased disposable income |
| Agriculture | 1,600 | Property tax relief |
| Tourism | 4,960 | Visitor fee elimination |
7. Appendices
7.1 Revenue Projections
- 2027 Base: $72 billion (adjusted from $73.7 billion, 2023).
- Growth Rate: 2.3% annually (South Dakota Department of Revenue).
7.2 Glossary
- GRT: Gross Receipts Tax, a 5% tax on business revenue.
- ZBB: Zero-Based Budgeting, a budgeting method requiring justification for all expenses.
7.3 References
- South Dakota Retailers Association, 2023 Taxable Sales Report.
- South Dakota Department of Revenue, 2023 Property Tax Estimates.
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📂 Learn More:
- 🌄 Our Vision for South Dakota: The future we’re building — bold, free, and family-first.
/why-south-dakota-is-awesome - 📊 End Property Tax: GRT Plan: How the 5% Gross Receipts Tax will replace property taxes — and why it works.
/core-grt-plan - 📈 Revenue Verification: Ensuring every dollar is accounted for — transparency you can trust.
/revenue-verification - 🛡️ Safeguards to Protect Homes: No tricks, no traps — just locked-in protections you can count on.
/doge-oversight - 🕵️ SD-DOGE: Our Government Watchdog: Efficiency, oversight, and a watchdog that works for the people.
/doge-oversight - ✊ Join the Movement: Your voice. Your state. Your moment. Get involved today.
/join-the-movement
Download the Full White Paper: /end-property-tax-grt-plan-white-paper.pdf