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PROMO Food - Grocery Shopping Cart Basket - iStock - Sergei Gnatiuk

Measure to end sales tax on groceries could go to South Dakota voters

© iStock - Sergei Gnatiuk
Kathleen Shannon

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(Greater Dakota News Service) South Dakotans face high prices at the grocery store and some are working to ease the burden.

A new report from the Federal Trade Commission finds some grocery retailers used the supply-chain disruptions of the pandemic to raise prices and collect bigger profits, even after supply chains regulated.

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PROMO Map - South Dakota State Map - iStock - klenger

© iStock - klenger

One South Dakota group is trying to reduce sticker shock by targeting the state sales tax on groceries. Dakotans for Health is sponsoring a citizens ballot initiative to repeal the 4.2  percent tax.

Rick Weiland, co-founder of the group, said lower food bills would make a meaningful difference for some.

"People of modest means, or low income hardworking families, disproportionately spend upwards of 30 percent on food," Weiland pointed out. "This is going to be helpful."

South Dakota is one of only two states in the country to apply its full state sales tax rate to groceries with no exemptions, Mississippi being the other. More than 9 percent of South Dakotans are considered food insecure, meaning they do not always have access to enough healthy food.

The grocery tax has been a popular topic among state legislators in recent years. Republican Governor Kristi Noem even campaigned on the promise to repeal it. Critics have said proposing a tax cut without a way to finance it is irresponsible.

Weiland pointed out Governor Noem had a formula spelled out when she brought forward her bill in 2023, which was voted down.

"She had no problem defending her position in front of the Legislature, in terms of how much revenue the state was going to lose and where they could make it up," Weiland recounted.

The initiative needs about 17,500 signatures by next month to appear on the November ballot.