Bill > HB1019

This bill proposes a comprehensive tax reform package focused on eliminating property taxes for owner-occupied single-family dwellings while simultaneously increasing various gross receipts and use tax rates. Specifically, the bill reduces the property tax mill levy for owner-occupied single-family homes to zero for school district general and special education funds, effectively removing this tax burden from homeowners. To offset the lost revenue, the bill increases the gross receipts and use tax rates from 4.2% to 5% across multiple sectors, including retail sales, services, telecommunications, transportation, and rental services. The legislation intends to maintain school district funding levels by using the increased tax revenue to replace the foregone property tax revenue, ensuring that school districts do not experience a financial shortfall. The tax rate changes will be effective from January 1, 2026, and are set to automatically revert to their previous rates on June 30, 2027, unless further legislative action is taken. The bill also includes provisions to adjust state education aid and local effort calculations to maintain the existing balance between local and state funding for educational needs.

Government Affairs

https://sdlegislature.gov/#/Session/Bill/25671