This bill reduces property taxes for homeowners by lowering the mill levy rate on owner-occupied single-family homes from $5.21 to $20.51 per $1,000 of taxable value (with the exact figure clarified in the bill text). It simultaneously raises the state sales tax from 4.2% to 4.7% for 2026-2027 and to 5% after 2027, and expands the gross receipts tax to cover more services like dry cleaning, beauty shops, and rentals. The revenue from these tax increases is explicitly allocated to replace lost school district property tax revenue and fund pay raises for state and school employees. The bill ensures school districts maintain their total funding levels under the new system.
HB 1113 establishes a downpayment assistance program for manufactured or mobile home buyers in South Dakota. The program provides zero-interest loans of up to $10,000 per applicant from a $5 million revolving fund in the South Dakota housing infrastructure fund. Eligibility requires household income below 120% of the state median income and purchasing a home meeting federal safety standards and local zoning requirements for single-family residences. Repayments return to the fund to support new loans, with loans secured by a second lien due upon home sale or repayment of the primary mortgage. This directly assists low-to-moderate income residents seeking to purchase qualifying manufactured or mobile homes.
HB 1259 requires South Dakota's Department of Revenue to offer online applications for several existing property tax relief programs, replacing the current paper-form requirement. It directly affects property owners applying for relief, including veterans with service-connected disabilities, surviving spouses of veterans, paraplegics, and residents eligible for tax freezes. The bill amends multiple statutes (§§ 10-4-24.14, 10-4-40, 10-4-41, 10-6A-4, 10-6B-9, 10-6C-3) to mandate that applications for these programs must be accessible via the Department's website. This change streamlines the application process by allowing online submissions instead of paper forms, while maintaining confidentiality for all submitted documents.
HB 1317 removes a 10% annual cap on how much South Dakota counties and municipalities can increase property taxes using accumulated unused index factors. Currently, local governments could only raise taxes based on these factors up to the prior three years' total or 10%, whichever was lower. The bill eliminates the 10% limit, allowing them to use all accumulated unused index factors from prior years without this restriction. This directly affects local governments' ability to adjust property tax revenue annually. The change modifies how county auditors calculate annual tax revenue limits under state law.
HB 1307 limits annual increases in the assessed value of owner-occupied single-family homes in South Dakota to a maximum of 3% per year for property taxes payable in 2027-2031. This applies to all such properties within a county, with exceptions allowing higher increases for new construction or property reclassified as owner-occupied. Counties must still follow other assessment rules under § 10-6-121. The law takes effect July 1, 2027.
HB 1289 modifies South Dakota's rules for creating tax increment financing (TIF) districts, which local governments use to fund development projects by capturing future tax growth in designated areas. The bill changes the requirement that a district's assessed value plus existing TIF districts cannot exceed 10.5% (previously 50%) of a political subdivision's total taxable property value. It also revises the criteria for designating a TIF district, requiring that either 25% of the district's area be blighted or 50% must stimulate economic development, and adds new consent rules: counties need municipal approval to create a TIF within city limits, and cities need county approval for TIFs spanning county areas. These changes directly affect counties and municipalities seeking to establish TIF districts for economic development projects.
HB 1312 limits annual increases in the assessed value of owner-occupied single-family homes to an inflation-based index, preventing rapid tax hikes for homeowners. It applies only to homes where the owner lives, not rentals or commercial properties. The bill requires full reassessment at market value when a home is sold (capped at sale price), and allows limited value increases for property improvements or changes in use. Taxing districts must maintain revenue levels from 2025 or earlier, adjusted for inflation, to avoid exceeding mill rate limits.
HB 1319 updates tax rules for new or renovated properties in designated areas. It allows county commissioners to use a special formula for up to five years after construction to partially or fully exclude new property value from taxes, but this applies only to specific qualifying properties like new industrial buildings ($30k+ value), affordable housing (meeting income rent limits), or commercial renovations ($30k+ value). The law explicitly excludes properties within tax increment financing districts from this tax relief. After five years, these properties must be taxed at standard rates like other properties. This directly affects developers and property owners building qualifying structures in eligible zones.
HB 1321 requires county treasurers to calculate excise tax on used vehicles sold by private individuals (not licensed dealers) using the amount listed on the bill of sale, rather than the vehicle's retail value from a dealer guide. It directly affects private sellers and buyers of used vehicles, as well as county tax offices responsible for collecting the tax. The bill mandates that both parties submit a bill of sale to the treasurer; if missing, tax is assessed based on the dealer guide value. This change replaces the previous default method for private sales, ensuring tax is calculated from the actual transaction amount documented on the bill of sale.
South Dakota's SB 12 allows qualifying veterans with certain disabilities (like loss of use of both lower extremities) or their unremarried surviving spouses to request refunds for property taxes paid in the previous four years if they missed the application deadline for an existing property tax exemption. The bill amends tax exemption rules to permit petitions to county commissioners for these refunds, which the commissioners may approve or deny at their discretion. It directly affects veterans and surviving spouses who previously paid taxes they might have qualified to avoid. The refund mechanism applies only to taxes paid in the four years prior to the petition, not future exemptions.
