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create the property tax local effort replacement fund, to reduce certain property taxes, and to increase the rates for certain gross receipts taxes and use taxes.

SB 99 creates a new fund to help replace property tax revenue by increasing sales taxes on certain goods and services, while reducing school property taxes—particularly eliminating taxes on owner-occupied homes starting in 2027. The bill modifies South Dakota's gross receipts tax and use tax rates across multiple categories to generate revenue for this replacement fund. Essentially, it shifts some school funding from property taxes to sales taxes, with homeowners seeing the biggest property tax relief.

impose a transaction tax and dedicate revenues collected to supplant certain property taxes, and to provide a penalty therefor.

This bill creates a new transaction tax in South Dakota and uses the revenue collected to reduce property taxes on homes, farmland, and other property across the state. The tax revenues will first reduce property taxes on owner-occupied homes statewide, then on agricultural land if money remains, and finally on other property—all proportionally across counties. The bill requires county auditors to report current property tax amounts to the state so the Department of Revenue can distribute replacement funds fairly.

reduce the sales and use tax rates on food, to increase the rates for certain taxes, use taxes, and excise taxes, and to provide a new fund for school district capital outlay projects.

HB1281 lowers the sales tax rate on food while raising sales and use tax rates on other goods and services, along with certain excise taxes. The bill also creates a new fund dedicated to helping school districts pay for capital outlay projects like building repairs and expansions. These tax changes are designed to shift the tax burden away from groceries and toward other purchases to fund school infrastructure improvements.

authorize the imposition of a county option gross receipts tax to reduce owner-occupied property taxes.

Counties can now choose to impose a new tax on gross receipts (money businesses take in) to help reduce property taxes on homes that owners live in. The bill requires property tax bills to separately show homeowners how much of their property tax reduction comes from this new county gross receipts tax, starting in 2028. This gives counties a new tool to shift some tax burden from homeowners to businesses.

proposing and submitting to the voters at the next general election, an amendment to state law to reduce certain property taxes for owner-occupied property, and to increase the rates for certain gross receipts taxes and use taxes.

South Dakota voters would decide whether to reduce property taxes on owner-occupied homes while increasing sales taxes on certain goods and services to offset the lost revenue. The proposal would lower the school property tax rate for homeowners from $2.51 per $1,000 of home value to essentially zero, while raising gross receipts and use tax rates elsewhere in state law.

modify provisions for a tax collection agreement with an Indian tribe.

South Dakota can now enter into tax collection agreements with Indian tribes to collect a broader range of taxes, including new categories like the gross receipts tax on visitor-related businesses and the excise tax on farm machinery. The state can retain an agreed-upon percentage of collected revenue as an administrative fee for handling the collections. This expands the types of taxes previously available under these agreements.

authorize municipalities to establish a local funding mechanism for capital improvement projects.

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.

require that county treasurers calculate excise tax using the amount shown on a bill of sale for a used vehicle sold, leased, or transferred by a person other than a licensed motor vehicle dealer.

This bill changes how county treasurers calculate excise tax on used vehicles sold between private individuals (not dealers) by requiring them to use the amount listed on the bill of sale rather than other valuation methods. Currently, the law allows dealers more flexibility in how purchase price is calculated for used vehicles, but this bill standardizes the process for private sales to rely on the bill of sale amount. This creates a clearer, more uniform way to determine what tax private sellers and buyers owe on used vehicle transactions.