The bill was passed as property tax relief in the last days of the 2026 legislative session, but this poor legislation would result in a permanent wealth transfer from the state’s working families to the most affluent homeowners.

SB 245 would draw an estimated $110 million of revenue from a scheduled sales tax increase from 4.2% to 4.5% in 2027 into a relief fund for single-family homeowner property taxes. 

This increase is currently scheduled to happen next year, unless the South Dakota Legislature decides to address it in their next session. 

Everyone will pay the increased sales taxes, but SB 245 only provides tax relief to single-family, owner-occupied homes. No other class of property qualifies (ag, rental homes, apartment buildings).

SB 245 ignores the over 30% of South Dakota residents who rent because rental homes and multi-family dwellings are not eligible for relief. South Dakota renters already spend 35% or more of their income on rent.

Renters are also facing skyrocketing rent prices; SB 245 asks them to pick up the tab for homeowner relief as well.

Rising property taxes is a problem all across South Dakota. But SB 245 does not address the underlying reasons; it only proposes shifting some of the burden from property taxes to sales taxes. 

Everyone pays the same sales tax rate no matter their income, but only homeowners will receive any benefit. And this benefit will be offset by having to pay more sales taxes.

That’s a good question. So far this has not been easy to figure out. According to reporting from the South Dakota Searchlight: revenue from the increase in the statewide sales tax rate is expected to reduce property taxes by $1.683 for each $1,000 of a home’s taxable value, according to the state Bureau of Finance and Management. For the average home with a taxable value of $250,000, that’s about $420 of savings.

However, people will be spending more on sales taxes, $135 per year on average, according to the Searchlight’s reporting. That means the net savings (for homeowners only) will be about $285. 

SB 245 uses sales tax (paid by everyone on almost everything we use every day) and then will use that money to give homeowners a break on their property taxes. 

Because sales taxes are paid at the same rate by everyone regardless of income, working families and people living paycheck-to-paycheck are helping foot the bill for property tax relief for people with high-end homes. The more valuable the house, the bigger the relief. Paid for by everyone else struggling to pay their bills. 

No. SB 245 will only provide relief to homeowners. Other types of property, like agricultural land or rental homes, apartment buildings, and commercial property are not included. 

There is NO cap on the amount of relief a homeowner can receive. The more expensive the home, the bigger the relief. 

Using the formula provided in the Searchlight reporting, a home valued at $250,000 would be eligible for $420 in relief. (Every $1,000 of a home’s taxable value gets $1.683 reduction in taxes). 

Using that formula, a home with $1 million in taxable value would be eligible for $1,683 in relief. Using this structure, the most affluent people get the most benefit.

SB 96 was the bill that will allow counties to implement an additional half-percent sales tax to fund property tax at the county level. Effectively, SB 96 would allow local governments to impose a similar tax shift that the state is imposing through SB 245. This referendum effort only applies to SB 245, which we believe is bad for South Dakota. If a local government tries to use SB 96 locally, that decision will also be referrable.