South Dakota’s Initiated Measure 28 Undermines Sales Tax Rate Reductions

South Dakota’s Initiated Measure 28 proposes something popular, common, and, particularly in South Dakota’s context, misguided. The measure, which attempts to exempt groceries from the sales tax, is ambiguously drafted, with the potential to exempt not only groceries but also cigarettes and other non-grocery products from sales and excise taxes. And in a state that forgoes income taxes and instead relies on an unusually broad-based sales tax, carving up that base is no small thing, especially when (despite the popularity of grocery exemptions), the evidence suggests that grocery exemptions are an unusually poor way of providing tax relief to low-income households.

Source Tax Foundation

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