A bill that throws a wrench in some property tax relief plans has survived its first steps in the appropriations committee.

The proposal would make plans to pay for property tax relief with sales taxes much harder.

In a political climate hungry for tax relief, the proposal fronted by Senate Pro Tem Chris Karr would remove the sundown on South Dakota’s sales tax “holiday.” That measure, approved in 2023, dropped the sales tax by three-tenths of a percent and is on the cusp of expiring.

It’s not the first time Karr has made efforts to work on the statewide sales tax.

“It’s also something that impacts everybody," Karr said. "So, if we’re going to provide relief in some way, shape, or form, if we’re collecting more than we’re using, then it should go back to all folks who are paying into it. Who are buying food, clothing, and all the items that sales taxes charge.”

However, Karr said leveraging sales tax to provide much-debated property tax relief is fundamentally unfair to non-property owners. That mindset is shared by Senate Appropriations Chair Ernie Otten.

“When you look at it as tax policy and start sniffing around on sending it as relief for property tax, I totally agree – that is just bad tax policy,” Otten said.

This philosophy is not universal in the Capitol though. Doug Abraham with the state Retailors Association said this is their preferred path to property tax relief.

“I understand the good Senator has a different theory on tax policy, I think there is a lot of different ways to look at this," Abraham said. "What he mentioned, and use this in a different light, you’re right – everybody pays sales tax – but a disproportionate amount of homeowners share the burden for local taxes that are not paid by those individuals who are not homeowners.”

With that in mind, the upcoming floor debate will provide insight into the bigger picture of lawmakers’ feelings toward the property tax question. The bill advanced on a 6-3 vote.