Hughes County Commission wanting feedback from county residents regarding whether or not to put new property tax and sales tax relief bills into effect

The Hughes County Commission wants to hear from county residents as they consider what financial options they have under a pair of bills that went into effect in South Dakota on July 1, 2026.

The Commission wants to hear residents thoughts on:

1. Whether Hughes County should consider adopting the optional county sales tax allowed through Senate Bill 96?
2. The balance between sales tax as it relates to Senate Bill 245 and property tax relief that may be connected to implementation of SB 96?
3. How these changes may affect homeowners, businesses, visitors and communities within Hughes County?

Understanding South Dakota’s Property Tax Relief: SB 96 and SB 245

The South Dakota Legislature passed two bills in 2026 designed to reduce property taxes for homeowners. While both bills provide tax relief, they work in different ways.

The information that follows is a summary provided by Hughes County in order to help residents understand the potential impacts of putting one or both bills into effect.

Senate Bill 96 (SB 96) – A Local County Option

SB 96 allows each county to decide whether to adopt an ordinance creating up to a 0.5% county sales tax. The revenue generated from that sales tax would be used to reduce the county’s property tax levy, lowering the county line item on your property taxes for property owners.

Points to consider:

• Adoption is optional; county commission must pass an ordinance specifying the tax rate, effective date and creation of fund.
• The adopted ordinance is subject to a local referral or public initiative.
• If adopted, the sales tax revenue must be used to reduce county property taxes.
• This gives each county the flexibility to determine whether the additional sales tax would provide enough revenue to offset county property taxes.
• County is allowed to use a fraction of the fund for initial administrative set up costs and for subsequent years.
• Collected and administered by SD Department of Revenue.
• Allocated as direct credit on each owner-occupied tax bill in an equal percentage.

For a $325,000 home valued at 85% or $276,250/1000 x 2.53 (county levy), the county tax on that home would equal $696.798.

Senate Bill 245 (SB 245) – Statewide Property Tax Relief

Unlike SB 96, SB 245 applies statewide. It reduces property taxes by providing additional state funding for public education, which lowers the amount that school districts need to collect from local property taxes. The funding comes primarily from the scheduled increase in the state sales tax rate.

What does this mean for Hughes County?

If the school portion of a homeowner’s property tax bill decreases because of SB 245, homeowners will see savings regardless of whether Hughes County adopts SB 96.

The amount of savings will vary depending on:

• The value of the property.
• The applicable school district tax levy.
• Any adjustments made under the state’s funding formula.
• This money is used to “buy down” or offset the local owner-occupied property tax levies traditionally pay to fund local general education formula.
• A one-time transfer from the state general fund of $55,896,576 was scheduled to occur on July 1, 2026, to start the Homeowner Property Tax Reduction Fund.

The owner-occupied educational tax on a $325,000 house within the city limits of Pierre could decrease by $621.45.

How the Bills Work Together

SB 96 provides an optional local tool for Hughes County to reduce the county portion of property taxes.

SB 245 provides statewide relief by reducing the school portion of property taxes.

If Hughes County chose to implement SB 96, homeowners could receive savings from both the county levy reduction and the statewide school tax reduction.