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GROCERY SHOPPERS PAID MORE FOR THEIR FOOD
TO MAKE POSSIBLE SD’S SUCCESS AT THE SUPREME COURT
For 14 years South Dakotans have been paying higher tax on their groceries in order to make it possible for South Dakota to win its tax case in the Supreme Court.
How did this happen? The preparation for the state to collect sales tax on online sales caused a significant hike in the food tax. It did not cause a tax increase on any other purchases, only food.
Before 2003, South Dakota cities had been limited to 1% tax on food. Then, tax â€œstreamliningâ€ rules were needed in order to position the state to tax online sales. The new rules said each city may have only one sales tax rate, even though the rules allowed the state itself to have a lower rate on food, even zero tax.
With the new rules, cities’ food taxes rose from 1% to 2% in most South Dakota cities, rather than lowering the tax on other things to match the 1% on food. Some cities had not been taxing on food at all, such as Rapid City, Mitchell, Spearfish, Pierre, New Underwood, and Wentworth. They were forced to start taxing groceries.
â€œThe higher food tax has meant South Dakotans have been paying more for every breakfast, lunch and dinner for 14 years now to help win the Supreme Court case on collecting online sales tax,â€ says Cathy Brechtelsbauer, state coordinator for Bread for the World.
â€œWe saw it coming back then. Some legislators told us they would cut the food tax when the state finally receives tax from online sales,â€ she remembers, â€œso the next legislature should recognize the contribution grocery shoppers have made to this Supreme Court success and make the next tax cut a cut in the food tax.â€
With cities still allowed only one tax rate, a food tax cut would need to be a reduction in the state’s portion of the sales tax.
News release, June 25, 2018
BREAD FOR THE WORLD -SOUTH DAKOTA
Cathy Brechtelsbauer, state coordinator, 605-335-6222, email@example.com
DaCola Note; This is one of the reasons I objected the half-cent increase in sales taxes to pay teachers. I found it counter productive to increase taxes on food to pay educators more. I would propose a total tax ban on food, not just a decrease. I know this has gone to the voters twice already and failed, but with the SCOTUS ruling I think this would be the perfect opportunity to end the food tax. I also think the state legislature should end exemptions on certain items that are not taxed now, like advertising. I have also argued that this won’t help main street businesses one iota. Even by taxing online items and essentially increasing the costs of those items so they can implement new accounting software, online shopping will still be less expensive due to volume, and more convenient because of choices. I also think the money raised by the state in new taxes will quickly be ate up by expanding government agencies that will be responsible in collecting these taxes. At the end of the day we have accomplished nothing but increasing prices for consumers to grow government. Thanks Marty Jackley and Deb Peters, for nothing.
As if it isn’t bad enough that the state taxes food, and increased it by a half penny last year, now the state wants to implement another penny and a half on Farmer’s Market food sold by Falls Park. The state may be able to pull this off. Because state law saysÂ they can charge this additional tax to any retailer at a tourist site.
State Rep. Jamie Smith, D-Sioux Falls, said while he understands the revenue office is only enforcing the laws that are already on the books, an exemption for farmers markets is something he’d support. While he believes there shouldn’t be any taxation on food, burdening local producers with a higher tax than grocery stores will only deter the public from using alternative food sources.
â€œWe’re discouraging locally grown products,â€ he said. â€œThose are dollars staying local right here. The person that grew that carrot lives here, spends money here and goes to school here.â€
I guess I would have two arguments against the additional tax. First off, they are not selling souvenirs, they are selling FOOD. Secondly, the Farmer’s Market isn’t really in Falls Park, it’s actually wedged between a stinky meat packing plant, and a blue-collar bar, hardly the tourist attraction. People come to the market to buy fresh produce and the occasional jar of raw honey. They are not buying T-shirts of Falls Park.
I guess things are getting so desperate for the state and the city, they are looking to start charging additional fees on anything they can, including claiming organic food products are now souvenirs.
The sad part is they continue to make excuses about the farm economy and internet sales instead of offering solutions (and there are really simple solutions out there). They keep wanting to beat the dead horse hoping to suck more money out of it.
Let’s face it, sales taxes are regressive and primitive. Don’t get me wrong, they are applicable for many things, but should NEVER be charged on necessities like Food, Clothing and Energy costs.
Of course everyone fears an income tax. To most hard working South Dakotans, an income would never even touch you or effect you.
I would suggest we implement a three step process over 6 years;
First step would be to eliminate ALL sales taxes on anything tangible or a serviceÂ that is considered a necessity of life or living. For example, you wouldn’t pay a tax to get your tire fixed on your car but you would pay one at a sun tanning salon. I would then increase that sales tax to 10-12% on all the remaining products and services. There would also be a ‘luxury’ clause. If you bought a minivan for your family of 5, you probably wouldn’t pay a tax on that, but if you bought a Porsche Crossover, there may be a tax. Same would go with luxury homes.
I would wait two years before implementing step two, which would be a income tax on corporations profiting more then $2 million a year, singles making more than $100K a year and households making more than $200k a year. This would be a flat tax of about 5-7% with NO exemptions.
I would wait another two years to implement the last stage, shut down Video Lottery. I would keep property taxes where they are.
Let’s face it, we can continue to bitch and complain about sales tax revenue going in the hole, but as the gap between the rich and poor get bigger, it’s reality, because it is a regressive tax. Tax those who can afford it.
You know my feelings on this. While the (business) community bands together to help a food bank charity, wouldn’t it just be better if these businesses paid their employees enough so they can buy their own food? I know we will never totally eliminate hunger. There will always be people who can’t afford food, such as those on disability or the elderly that can’t work anymore. But it is a sad when a working family can’t afford to buy their own food.
On top of that, the ignorance of our governor and state legislature raising taxes on food so we can pay ONE sector of public employees more (a program that is running into snags and not really working the way it intended).
It is time our lawmakers get serious about the minimum wage in our state and raising the wages of ALL workers in this state to compete with other states. Enough of selling us as a low wage state.
Of course some lawmakers still think it is all just a big joke. Our esteemed mayor took that opportunity when he jokingly said this during the above press conference about the administration building (about 6 minutes in);
“I like new and big buildings to . . . I do. Did I just say that? I think building new is better then remodeling.”
The poor and the hungry seem to be just a big joke to some people. Make sure the developers and contractors in this town stay well fed. And while we are planning to bond for a $22 million dollar administration building, we are proposing no wage increases for city employees in 2017. Better funnel some more money through the development foundation so they can give it to the food bank. Now that’s workforce development at it’s best!
I commend anybody who is willing to give towards combatting hunger Â in SD;
large donation from a Huron couple is helping a non-profit organization which fights hunger in the state.
With a food distribution to follow, officials with Feeding South Dakota announced the $1 million donation from Paul and Muffy Christen Tuesday.
The money will go into an endowment. Its interest will feed South Dakotans for years to come.
I think it is great many leaders and philantropists are coming forward in SD to help this charity, but I often wonder if these same leaders put the same amount of time and effort into raising wages in South Dakota and raising our quality of life if it would be time, energy and money better spent instead of helping these people once they hit the bottom of the pyramid. it would also be nice if we eliminated the sales tax on food.
Like I said, there will always be â€˜hungry’ people in our state that need assistance, but let’s work harder to reduce those numbers by helping some of these people make a living wage. Prevention is usually the best cure to a problem.