{"id":35963,"date":"2023-02-03T15:44:13","date_gmt":"2023-02-03T20:44:13","guid":{"rendered":"https:\/\/unitedresourceconnection.org\/cannon-ball-nd-58528\/sd-tribes-would-lose-millions-for-tribal-government-if-state-eliminates-food-sales-tax\/"},"modified":"2023-02-03T15:44:15","modified_gmt":"2023-02-03T20:44:15","slug":"sd-tribes-would-lose-millions-for-tribal-government-if-state-eliminates-food-sales-tax","status":"publish","type":"post","link":"https:\/\/unitedresourceconnection.org\/cannon-ball-nd-58528\/sd-tribes-would-lose-millions-for-tribal-government-if-state-eliminates-food-sales-tax\/","title":{"rendered":"SD tribes would lose millions for tribal government if state eliminates food sales tax"},"content":{"rendered":"
<\/span><\/div>
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Sen. Ryan Maher R-District 28<\/p>\n<\/div>\n

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Rep. Peri Pourier, D-District 27<\/p>\n<\/div>\n

PIERRE \u2013 A food sales tax cut that passed a House panel Thursday morning has raised concerns for South Dakota\u2019s nine tribal governments.<\/p>\n

An official with the Bureau of Finance and Management estimated that the tribes would lose about $2 million in funding for tribal government operations if the food tax is eliminated, but admitted to lawmakers that \u201cthe issue has just arisen in the last couple days.\u201d<\/p>\n

The 4.5% tax on food brings in an estimated $102 million to the state total. Gov. Kristi Noem vowed to eliminate the tax during her re-election campaign and during her budget address last month.<\/p>\n

Each tribal government in South Dakota has an agreement with the state to receive a portion of the food sales taxes that originate on its reservation. State Finance Commissioner Jim Terwilliger told the House Taxation Committee on Thursday that the question of how the food tax cut would impact tribal budgets has not been explored, but that there are \u201cprobably workable solutions.\u201d<\/p>\n

\u201cThere are some ways we can address those concerns so tribes aren\u2019t adversely affected,\u201d Terwilliger said.<\/p>\n

Rosebud, Cheyenne River oppose \u2018devastating\u2019 bill<\/p>\n

The food sales tax is only a portion of the tax revenues collected by the state on tribal reservations. The revenues include money from taxes on retail sales and services, use taxes, and excise taxes on cigarettes, tobacco, fuel and farm machinery. Food sales tax falls within retail sales and services and use taxes.<\/p>\n

The percentage of tax revenue returned to tribal governments varies from tribe to tribe, and is based on agreements with the state. The Rosebud Sioux Tribe, for example, gets back 93% of retail sales and service tax revenue.<\/p>\n

For Rosebud, the food sales tax accounts for roughly 25-30% of that figure, according to Whitney Meek, director of revenue for the tribe. A representative for Rosebud testified against the bill at the House Taxation Committee meeting.<\/p>\n

\u201cI don\u2019t see how the tribe itself could afford to lose that kind of revenue,\u201d Meek said, estimating that the Rosebud Sioux Tribe collects close to $2.5 million annually in various taxes from the state. Aside from taxes, tribal governments also receive funding from federal grants and land leases.<\/p>\n

However, she thinks Rosebud \u201ccould handle\u201d a 1-2% reduction in food sales tax. Two other bills,\u00a0HB 1095<\/a>\u00a0and\u00a0HB 1096<\/a>, would lower the state food sales tax rate and use tax rate to 2.5% and 3.5%, respectively.<\/p>\n

\u00a0Sen. Ryan Maher is a Republican lawmaker representing Butte, Corson, Dewey, Harding, Perkins and Ziebach counties. He resides in Dewey County. (Courtesy of South Dakota Legislature)<\/p>\n

The Department of Revenue has yet to provide South Dakota Searchlight with the monetary amounts received by tribal governments during fiscal year 2022.<\/p>\n

The loss in revenue would be \u201cdevastating\u201d for the Cheyenne River Sioux Tribe, according to Lynette Dupris of the Cheyenne River revenue department. The Cheyenne River Sioux Tribe also had a representative oppose the food sales tax bill at the House Taxation Committee.<\/p>\n

\u201cIn order for a government to function, they need tax revenue,\u201d Dupris said.<\/p>\n

Cheyenne River has an 85% tax agreement with the state, which amounted to about $4.3 million in total tax revenue during fiscal year 2022.<\/p>\n

\u201cWhat do we have here? Just two grocery stores, a few convenience stores, a hardware store and a clothing store,\u201d Dupris said. \u201cThat\u2019s all we have here.\u201d<\/p>\n

The Cheyenne River Reservation is part of District 28, which includes most of northwestern South Dakota. Sen. Ryan Maher, R-Isabel, said the bill needs to find a way to \u201chold the tribes harmless.\u201d He is opposed to the bill.<\/p>\n

\u201cThe state would have to subsidize them to hold them harmless. I don\u2019t know how that works, since food tax is a moving number and we\u2019re in an inflated economy right now,\u201d Maher said.<\/p>\n

Tribes \u2018should have been at the table already,\u2019 Dems say<\/p>\n

\u00a0Rep. Peri Pourier, D-Rapid City (Courtesy of South Dakota Legislature)<\/p>\n

South Dakota Democrats held a press conference after the bill passed through the House Taxation Committee reprimanding the state for not having discussed the bill\u2019s impact on its tribal governments beforehand.<\/p>\n

\u201cThey should have been at the table already,\u201d said Rep. Oren Lesmeister, D-Parade.<\/p>\n

Tribes were not consulted prior to the introduction of the bill, he said, which he described as an insult to the state\u2019s nine tribal nations. He urged Noem to reach out now, even if it would be \u201ca little late.\u201d<\/p>\n

Rep. Peri Pourier, D-Rapid City and member of the House Taxation Committee, voted in favor of the bill and to pass it onto Appropriations in hopes that the bill could be amended to address tribal governments\u2019 concerns.<\/p>\n

\u201cWe have tribal nations who have sovereignty tied to this tax initiative\u2026 this wasn\u2019t talked to tribal nations beforehand,\u201d Pourier said during the hearing. \u201c\u2026They have to have an ability to say if they want this or not.\u201d<\/p>\n

Tribes taxing reservations themselves is a \u2018sticky wicket\u2019<\/p>\n

If South Dakota\u2019s food sales tax is eliminated, the tribal governments could collect food sales taxes themselves.<\/p>\n

But the tribe is only able to tax non-tribal members when it\u2019s\u00a0consensual or when a non-tribal member is on Indian lands<\/a>, which would apply to non-tribal members in Todd County, Meek said.<\/p>\n

\u201cIt kind of gets into a sticky wicket with jurisdictional issues,\u201d Meek said. \u201cThey have every right to dispute.\u201d<\/p>\n

Having the tax agreement with the state eliminates jurisdictional issues.<\/p>\n

\u201cIt is a complicated issue. That\u2019s why they have attorneys,\u201d Meek said.<\/p>\n

There are other issues complicating food tax collections on reservations, as well. About one-third of residents in counties located mostly within a reservation \u2014 such as\u00a0Todd<\/a>,\u00a0Oglala Lakota<\/a>,\u00a0Dewey<\/a>\u00a0and\u00a0Charles Mix<\/a>\u00a0counties \u2014 receive benefits through the federal Supplemental Nutritional Access Program (SNAP), commonly known as food stamps. People receiving SNAP benefits do not pay sales tax.<\/p>\n

If the Rosebud Sioux Tribe enforced its own food sales taxes, Meek said she could easily see someone driving 13 miles off the reservation to White River to buy groceries.<\/p>\n

Hiring people to collect the reservations\u2019 taxes and developing an infrastructure for online sales would also be difficult, she said. The state has infrastructure for online tax remittances, having won the right to collect such taxes through a Supreme Court victory in 2018.<\/p>\n

\u201cThere are only, say, 50 businesses located on the whole reservation, and over 1,000 for remote sales and internet sales,\u201d Meek estimated. \u201cHow would we even begin to go about collecting that? I\u2019d say that\u2019s impossible. Send a tax return to Amazon and they\u2019d laugh us off. We don\u2019t have the teeth to enforce our laws on someone outside the reservation.\u201d<\/p>\n

The food tax proposal passed the committee with a 12-1 vote. It will now head to the House Appropriations Committee for further consideration.<\/p>\n

The post SD tribes would lose millions for tribal government if state eliminates food sales tax<\/a> first appeared on Native Sun News Today<\/a>.<\/p>\n

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Sen. Ryan Maher R-District 28 Rep. Peri Pourier, D-District 27 PIERRE \u2013 A food sales tax cut that passed a House panel Thursday morning has raised concerns for South Dakota\u2019s nine tribal governments. An official with the Bureau of Finance and Management estimated that the tribes would lose about $2 <\/p>\n

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