South Dakota: No Tax On Food
- Sales Tax News
- Jan 28, 2012 | Susan McLain
The bill specifically states to apply “…a tax of zero percent on the gross receipts from the sale of food.” Food does not include candy, alcoholic beverages, soft drinks, dietary supplements or food sold through a vending machine. In addition, prepared foods will not be exempt from sales tax.
To make up for any lost revenue, the state proposes in the same bill to increase the state sales tax rate from 4% to 4.35% on “…the gross receipts of all sales of tangible personal property consisting of goods, wares, or merchandise.” In addition, the tax will apply to “…the gross receipts of any person from engaging or continuing in any of the following businesses or services in this state: abstracters; accountants; ancillary services; architects; barbers; beauty shops; bill collection services…” and many other services industry businesses. To see a full list, check out HB1216.
The response from South Dakotans has been positive. ABC’s KSFY reports that one consumer declares, “…it seems like a no-brainer that literally would help a lot of people.” State Representative Marc Feinstein supports that perspective and says, “It’s going to be good for everybody, not just the people struggling…everyone will benefit from zero percent sales tax on food.”
Currently, neighboring states Iowa and Minnesota do not tax groceries, so South Dakota will be in good company.