JUNE 29, 2023:
The law lowering South Dakota’s overall state sales tax (HB 1137) will go into effect Saturday. The bill temporarily lowers the state sales tax rate from 4.5% to 4.2%.
Governor Kristi Noem says this tax reduction will give people some relief from rising inflation and higher prices for goods and services. She says some help, even if temporary, is better than none at all, but she will continue working to deliver permanent tax relief for South Dakotans.
The law includes a sunset clause which repeals the sales tax rate reduction as of June 30, 2027. The reduction does not impact sales tax charged by cities.
Frequently Asked Questions about the sales tax holiday can be found here.
APRIL 5, 2023:
On July 1, 2023, South Dakota’s tax rate will decrease from 4.5% to 4.2% and the state Department of Revenue is working diligently to account for the three-tenth percent sales tax decrease created by House Bill 1137.
The state tax rates affected by the changes are:
- Sales and use tax;
- Excise tax on farm machinery and farm attachment units;
- Amusement device tax; and,
- Motor vehicle gross receipts tax.
“It is our intent to make this transition as easy as possible for those reporting taxes,” said Department of Revenue Secretary Michael Houdyshell. “Our team is currently updating our forms, publications, and software, and communicating with stakeholders to answer questions about the new sales and use tax rate.”
HB 1137 includes a sunset clause which repeals the rate reduction effective June 30, 2027.
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