This bill proposes the elimination of property taxes on owner-occupied single-family dwellings in South Dakota, while simultaneously increasing certain gross receipts and use tax rates. Specifically, it sets the maximum mill levy for these homes to zero and raises the gross receipts tax rate from 4.2% to 5% for various retail goods and services. The revenue generated from these tax increases is intended to compensate for the lost property tax revenue, particularly for funding school district general and special education funds. Importantly, the bill clarifies that these changes will not affect the mill levies for other property classifications or the overall funding available to school districts.

Additionally, the legislation establishes a special education fund for school districts, funded through a property valuation-based levy, which will be calculated at eighty-five percent of market value. The bill outlines that funds from this levy can be utilized for assistive technology related to special education, while excluding real property improvements. It also introduces a new allocation structure for students with disabilities, effective July 1, 2024, and adjusts state aid to education based on local needs. Furthermore, the rental vehicle tax is increased from 4.2% to 5%, with these provisions taking effect on January 1, 2026. The bill also repeals a previous provision that would have reverted these amendments after a set period, ensuring their permanence.

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