Formula to “Eliminate Property Taxes”
Consider a Consumption Tax
Formula to “Eliminate Property Taxes”
Greetings! As promised, here is a proposal to eliminate all residential property taxes statewide. Before showing this proposal, I’d like to preface this by saying I feel our current property tax system is antiquated and quite frankly broken. It picks winners and losers and is taxing homeowners out of their homes, not to mention the stress and strain it is putting on homeowners.
We could discuss endless measures tweaking our property tax system, or we could look at options other states did or have done like proposition 13 in California, etc. Instead, let’s just think outside the box and come up with a property tax replacement, an elimination if you will. Are you with me so far? Here it goes.
For every penny, or 1% sales tax collected, it generates approximately 300 million in revenue. Property taxes collected in 2021 were 1,492 million. So, if we increased sales tax by a nickel and ½ penny (5.5%), that would generate 1.5 billion statewide. As you can see, this is more than enough revenue TO REPLACE ALL RESIDENTIAL PROPERTY TAXES STATEWIDE.
Too simple? Maybe? This would apply to residential properties not commercial or agricultural land. It would apply to the farm or ranch home because that is taxed separately from the agricultural land. Right now, our state sales tax is 4.5%. Adding the nickel would take it to 9.5%. If we wanted to be safe, we could make it 5.5% for an even dime (10%) state sales tax. If we added municipalities up to 2% more, that takes it up to 12%.
The advantage of this tax shift, called a “consumption tax”, means we are only taxed on what we consume, and another advantage is that our 13-1/2 million tourists would contribute more. In visiting with business owners, particularly those in the tourism industry, they felt a dime (10%) state sales tax would have minimal, if any, effect on their business. In visiting with homeowners, they overwhelmingly supported this tax shift. So, there you have it.
Recapping: This is only a proposal. Please send me your thoughts. Is it time to think out of the box? A dime state sales tax eliminates all residential property taxes within the borders of our great state that we call South Dakota.
To the citizens of South Dakota and to the men and women in uniform, in honor of all who served, in respectful memory of all who fell, and in great appreciation to those who serve today, Thank You, for giving me the opportunity to represent you.
Tim R. Goodwin, District 30 Representative and candidate for Senate

