Keeping Taxpayers Top of Mind

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Keeping Taxpayers Top of Mind

By: Gov. Larry Rhoden

April 24, 2026

Every taxpayer dollar belongs to the people. It's our job as elected leaders to spend the people's money as efficiently as possible to keep South Dakota strong, safe, and free. In recent years, South Dakotans made one thing very clear that they wanted property tax cuts - and this session, we delivered the largest property tax cuts in South Dakota history.

Since session ended, though, there's been a lot of misinformation about those property tax cuts. Recently, I celebrated Administrative Professionals Day by having some of my team over for breakfast. They answer countless phone calls, letters, and questions from South Dakotans. And they mentioned a recent uptick in questions about taxes. A lot of the calls were driven by misinformation that the Legislature raised sales taxes this session. So, I'm here to clear up the facts.

This session, most legislators agreed with me that South Dakotans deserve real, meaningful property tax relief. But there was a lot of division - about 50 different bills to address property taxes. So, we put the work in, and by the end of session we accomplished the largest property tax cut in South Dakota history. It wasn't easy. It took grit, hard work, and good 'ol fashioned negotiating. Here are the facts behind that tax cut:

Next year, the sales tax holiday is due to expire, meaning the state sales tax is set to go up by 0.3% next July. The Legislature tried to make that tax cut permanent and wasn't successful, and some legislators were chomping at the bit to spend those new tax dollars. So instead, we redirected that into a statewide property tax cut for homeowners. And you'll see that tax cut next year on taxes payable in 2027. That's not a new sales tax increase - the tax was already going up, and we're reinvesting it in a statewide property tax cut.

On top of that, we passed my bill to give the people in each county the option to cut property taxes further. Each county will have the option to replace some or all of their homeowner property taxes with a local half-cent sales tax. It's not a mandate - it's a choice. Local leaders and local voters will decide whether it's the right opportunity for their community - and I'm a big fan of local control!

There was one other bill that promotes local control: HB 1245. I received countless messages of support on this bill from mayors, city councilors, and business leaders from all over the state. They wanted their communities to be able to avoid bonding for projects (and avoid future property tax increases) by instead passing a penny sales tax for up to five years - and only if 60% of the people in their community were supportive.

I was initially skeptical of this idea, but I studied the bill and all of its safeguards. I recognized that it could be a good tool to keep our communities Open for Opportunity. As Mayor TenHaken points out, if Sioux Falls had this local option years ago, the city could have saved over $50 million on the construction of the Denny Sanford Premier Center.

We do a lot of things right in South Dakota. We have the 2nd lowest taxes in America because we always keep taxpayers top of mind. So, if you've called our office or stopped in and asked questions, thank you. It is important for me to understand your concerns and your questions. I hope I have answered some of them for you.

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