South Dakota cities can now create a local funding mechanism for capital improvement projects by imposing a gross receipts tax of up to one percent on businesses within their borders. To implement this tax, a city must establish a five-member capital improvement board (made up of one city council member and four residents) that reviews and approves any ordinance establishing the tax, which must specify its purpose and minimum revenue target. This gives municipalities a new revenue option to fund infrastructure and other capital projects without needing state approval.
The engrossed version BROADENS the tax base by explicitly including "products transferred electronically" and conforming the municipal gross receipts tax to both sales tax chapters (10-45 and 10-46) instead of just one, expanding what types of transactions can be taxed to fund local capital improvement projects.
The amendment clarifies that the gross receipts tax rate must conform to state tax law rather than simply not exceeding one percent, and it extends the effective period for tax ordinances to require at least ninety days' notice to the secretary of revenue before taking effect—STRENGTHENING the bill by tightening tax conformity requirements and providing clearer implementation timelines.
The amendment is a technical enrollment update that corrects the bill's codification reference from 26.800.20 to 26.800.21 and removes formatting markup (underscores and strikethrough indicators) used during the legislative drafting process, with no substantive changes to the bill's actual provisions authorizing municipalities to establish a gross receipts tax for capital improvements.
Signed by the Governor H.J. 578
Delivered to the Governor H.J. 556
Signed by the President S.J. 512
Signed by the Speaker H.J. 542
Senate Do Pass Amended Passed, YEAS 19, NAYS 15. S.J. 484
Local Government Do Pass Passed, YEAS 5, NAYS 2.
Local Government Scheduled for hearing
First read in Senate and referred to Senate Local Government S.J. 248
House of Representatives Do Pass Amended Passed, YEAS 36, NAYS 30. H.J. 278
House of Representatives Reconsidered Passed, YEAS 37, NAYS 29. H.J. 277
House of Representatives Intent to reconsider H.J. 265
House of Representatives Do Pass Amended Failed, YEAS 35, NAYS 30. H.J. 265
House of Representatives Motion to amend H.J. 264
Local Government Do Pass Amended Passed, YEAS 8, NAYS 4.
Local Government Motion to amend
Local Government Scheduled for hearing
First read in House and referred to House Local Government H.J. 192
Prime sponsor · Rep.
R
Cosponsors
Do Pass Amended
Local Government — Do Pass
Reconsidered
Do Pass Amended
Do Pass Amended
Local Government — Do Pass Amended