Proponent Arguments

According to Feeding South Dakota, the state’s largest hunger relief organization, 106,000 South Dakotans, including 1 in 6 children, are food insecure, meaning they don’t know where their next meal is coming from.

South Dakota and Mississippi are the only states that still tax groceries at the full allowable state rate. Because families with very modest incomes must spend up to 30% of their total household income on food, whereas more affluent families need spend only 7% of theirs, this means that ordinary families are spending 400% more of their total income on food than are the wealthy. That is not fair. It is time for South Dakota to let Mississippi be the only state so unfair as this.

For 20 years the state legislature has considered removing this unfair tax, but it has failed to act. Even Governor Kristi Noem, who made repealing the sales tax on groceries a key promise in her 2022 re-election campaign, could not get this done. Clearly we the voters need to do what politicians more beholden to their donors than to us have failed to do.

And remember, this amendment specifically preserves local governments’ taxing authority, so do not be misled by false claims that it will hamper local officials or result in onerous new taxes with zero chance of being enacted. These assertions are politician talk designed to mislead and scare voters into retaining a tax the politicians’ rich donors love, but which treats the rest of us unfairly.

Recent polling by South Dakota News Watch shows that 66% of South Dakotans support repealing the state’s grocery tax. When the legislature fails to act, it is time for the people to decide. Let’s make our voices heard and end this unfair tax.

Rick Weiland, Co-Founder Dakotans for Health

Opponent Arguments

IM-28 would lead to irresponsible funding cuts to essential government functions or new tax increases. It would eliminate sales taxes on MANY items other than food, cutting at least $176 million.
IM-28 would prohibit taxes on anything sold for human consumption, except alcohol and prepared food. This bad wording would eliminate taxes on tobacco (annual loss of $65 million), vaping products, CBD, toothpaste, aspirin, toilet paper, and many other products.
If IM-28 passes, it would have the absurd result where sales taxes would remain on a rotisserie chicken, but not a pack of cigarettes. IM-28 would prevent cities and towns from collecting sales taxes on consumable items, leaving a huge hole in local budgets.
State law says cities and towns can charge a sales tax only if it “conforms in all respects to the state tax on such items with the exception of the rate.”
This means that cities and towns can only tax the same items as the state – and if the state cannot tax “anything for human consumption,” neither than a city or town. IM-28 will eliminate funding for our communities and require cuts for law enforcement, roads, pools, and parks.
IM-28 will also reduce funding for Tribal governments via sales tax compacts with the state.
The bad wording in IM-28 is setting us up for a state income tax, or it was drafted wrong. Either way, it’s bad for South Dakota. IM-28 will cut at least $176 million each year and lead to significant cuts to education, healthcare, and state employees; or it sets us up for an income tax to fund needed services.

Vote no on IM-28.

Nathan Sanderson, Executive Director SD Retailers Association, President Coalition for Responsible Taxation, Treasurer South Dakota Against a State Income Tax