South Dakota Tax Law Takes Effect Without a Public Vote
A new South Dakota law that funds property tax relief for homeowners through a higher state sales tax took effect on June 25, 2026, after opponents failed to collect enough signatures to force a ballot referendum. The group South Dakotans for Fair Taxes announced Friday it could not reach the required threshold.
To refer the law to voters, the group needed 17,508 valid signatures from registered South Dakota voters. Their press release confirmed the failure but did not disclose how many signatures were actually gathered.
17,508 signatures required to refer the law to South Dakota voters; South Dakotans for Fair Taxes confirmed it fell short
The law targets a scheduled sales tax increase. South Dakota’s state sales tax rate was temporarily cut to 4.2% and is set to return to 4.5% in July 2027 when that reduction expires. The new law captures the revenue from that 0.3-point increase and directs it toward reducing property taxes imposed by school districts.
Renters Pay More; Homeowners Get the Benefit
Critics argue the law creates an unequal tax structure. Sales taxes apply to everyone at checkout, including on groceries. Property tax reductions benefit only homeowners.
“The cost of living crisis is hitting all South Dakotans. [The law] disproportionately benefits those with the most expensive homes and is paid for by the rest of us at checkout, including groceries for our families.”
Ned Horsted, chair of South Dakotans for Fair Taxes, June 2026
The coalition behind the petition included Bread for the World South Dakota, the South Dakota AFL-CIO, and Dakota Rural Action. Despite the coalition’s reach, the group could not turn out enough signers before the deadline.
South Dakota’s Petition Threshold Is a Real Barrier
South Dakota requires signatures equal to 5% of the total votes cast in the last gubernatorial election to refer a law to voters. That threshold, 17,508 signatures this cycle, reflects a high bar for citizen-led referenda in a state with a small and geographically dispersed population. The failure shows how even organized coalitions can fall short when a signature drive relies on volunteer infrastructure across a rural state.
The law now stands unless the legislature amends it or a future initiative overturns it.
What You Can Do Now
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Call your South Dakota state legislators at the South Dakota Legislature’s contact directory and ask them to amend the law to include renters in the property tax relief or to offset the sales tax impact on low-income households. The 2027 legislative session is the next opportunity.
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Contact the South Dakota Governor’s office at (605) 773-3212 and ask the governor to direct the Department of Revenue to study the distributional impact of the law on renters versus homeowners before the 4.5% rate takes effect in July 2027.
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Join South Dakotans for Fair Taxes directly at their next organizing meeting. Their coalition includes the SD AFL-CIO at (605) 338-4880. Ask how a future ballot initiative could be structured to qualify for the 2028 ballot with more lead time.
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Register to vote and recruit others. South Dakota’s petition threshold is tied to gubernatorial election turnout. Higher voter registration and turnout in 2026 will not change this law, but it shapes the signature threshold for future citizen referenda.
Sources
South Dakota Searchlight: Group Fails to Gather Signatures to Put New Tax Law on Ballot South Dakota Legislature: Referred Law Petition Requirements, 5% Threshold Rule South Dakota Department of Revenue: State Sales Tax Rate History and 4.2% Temporary Reduction Dakota Rural Action: About the Organization and Policy Priorities South Dakota AFL-CIO: Member Contact and Legislative Action Page
disproportionately benefits those with the most expensive homes and is paid for by the rest of us at checkout, including groceries for our families.”, Ned Horsted, chair of South Dakotans for Fair Taxes.
South Dakota Searchlight]