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repeal the expiration of a reduction in certain gross receipts and use tax rates.

This bill makes permanent a tax reduction that was previously set to expire on June 30, 2027. By repealing the expiration date, South Dakota will keep its lower gross receipts and use tax rates in place indefinitely instead of letting them revert back to higher rates. Businesses and consumers will continue to benefit from these reduced tax rates without any scheduled increase.

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.

provide an additional means of determining the purchase price of a used motor vehicle acquired by gift or other transfer.

This bill adds a new option for calculating sales tax on used vehicles given as gifts or transferred between private individuals—allowing the tax to be based on a submitted bill of sale instead of automatically using retail value when no bill of sale is provided. Currently, if someone receives a used vehicle as a gift or transfer and doesn't submit a bill of sale to the county treasurer, the state assesses tax based on the vehicle's retail value; this change gives people an alternative method to determine the taxable purchase price.

reduce certain property taxes for owner-occupied property, and to increase the rates for certain gross receipts taxes and use taxes.

This bill eliminates property taxes on owner-occupied, single-family homes by setting their school mill levy to zero, starting in 2027. To replace the lost property tax revenue for schools and fund state employee and Medicaid provider pay increases, the bill raises sales tax and gross receipts tax rates across the state. The changes are designed to shift the tax burden from homeowners to consumers making purchases.

deposit certain tax revenues into a homeowner tax reduction fund.

Starting July 1, 2027, South Dakota will redirect a portion of tax revenue from sales taxes, use taxes, and other business taxes into a new homeowner tax reduction fund instead of putting all that money in the general fund. Each year, the state treasurer must deposit whichever is greater: $100 million or a small percentage (three-tenths of one percent divided by the applicable tax rate) of the previous year's tax collections from these sources. This change only takes effect if a related bill (Senate Bill 125) also becomes law.