This bill proposes the elimination of property taxes on owner-occupied single-family dwellings in South Dakota, while simultaneously increasing the gross receipts tax rate from 4.2% to 5% for various services and goods. The legislation establishes a zero mill levy for these dwellings, ensuring that the lost property tax revenue is compensated through the increased tax revenues, which will support school district general and special education funds. Importantly, the bill clarifies that the mill levies for other property classifications will remain unaffected by these changes.

Additionally, the bill creates a special education fund for school districts, funded by a property valuation-based levy aimed at addressing the special education needs of children within the district. It specifies that this levy will be calculated at a median assessment level of eighty-five percent of market value, as determined by the Department of Revenue, and allows funds to be used for assistive technology related to special education, while excluding real property improvements. The bill also introduces new definitions related to disabilities, a revised allocation structure for students with disabilities effective July 1, 2024, and adjusts state aid to education based on local needs. Furthermore, it increases the rental vehicle tax to 5% and sets a future effective date of January 1, 2026, for certain provisions, while repealing a previous sunset clause.

Statutes affected:
Introduced, 01/08/2025: 10-12-42, 10-45-2, 10-45-5, 10-45-5.3, 10-45-6, 10-45-6.1, 10-45-6.2, 10-45-8, 10-45-71, 10-46-2.1, 10-46-2.2, 10-46-58, 10-46-69, 10-46-69.1, 10-46-69.2, 10-46E-1, 10-58-1, 13-37-16, 13-37-35.1, 13-13-71, 13-13-72, 13-13-72.1, 32-5B-20