Collectible coins and bullion would become subject to South Dakota’s sales tax, and the tax rate would increase for boats longer than 12 feet, under recommendations reached today by the Legislature’s sales tax review panel.
The suggested changes wouldn’t raise much — about $332,000, according to the state Revenue Department’s estimates — in additional revenue for state government’s treasury.
The review committee decided in a series of roll-call votes against repealing exemptions that totaled in the neighborhood of $40 million for agriculture chemicals, farm machinery parts and repairs, advertising, storage units and 10 other types of goods and services.
Rep. Mark Willadsen, R-Sioux Falls, agreed to carry the legislation to eliminate the sales-tax exemption for coins and bullion. The repeal will generate about $32,000 annually, based on collections prior to the exemption’s passage in 2007, Revenue’s Jan Talley said.
The sponsor of the coin and bullion exemption was the late former Rep. Gordon Pederson, R-Wall, whose funeral is Thursday.
The vote was 8-7 today in favor of seeking the repeal. Several legislators declined to vote for recommending repeal because of the timing.
“I’d hate to walk by and have him sit up in the casket,” Rep. Mike Verchio, R-Hill City, said.
The vote was 11-4 to recommend changing the tax rate on purchases of boats longer than 12 feet. The current excise tax is 3 percent. The panel’s proposal is to repeal the excise tax and levy the standard state sales tax of 4 percent.
Sen. Tom Hansen, R-Huron, volunteered to carry the boat-tax legislation. Making the vote easier for some panel members was the knowledge that shorter boats already are subject to the 4 percent tax rate.
Repealing the exemption for gate receipts and grandstand receipts at state, district, county and local fairs fell one vote short of recommendation. So did a proposal to override the state Supreme Court’s 2008 decision that the sales tax doesn’t apply to rentals of mini-storage units.
The panel finished its roll call votes in about two hours and then jousted, largely along party lines, about whether to use the committee’s allotted fourth and final day to talk about other ways to raise revenue.
House Democratic leader Bernie Hunhoff of Yankton said the panel should discuss ways to collect more sales tax on purchases made over the Internet and the use of state government reserve funds.
But the panel’s chairman, Rep. Chuck Turbiville, changed his mind from Tuesday and said the group needed to stick solely to the review of sales tax exemptions.
Turbiville, R-Deadwood, is chairman of the Legislature’s Executive Board that set the review of sales-tax exemptions and appointed the special panel.
The vote was 10-5 in favor of the committee dispensing with its final meeting day and closing out its work.