NOTE: A helpful bill is expected to be introduced in the 2014 legislature to end the state's portion of the food tax. Actually, it is a tax shift. To preserve state revenue, the tax on non-food would go to about 4.3%, while food tax drops from 4% to 0%. This helps make food more affordable and shifts SD's tax burden a little farther up the income scale.
Also be alert: O There could be other helpful bills, as there is more than one way to end or reduce the food tax. And watch out for other bills that sometime show up that would make the food tax worse.
About South Dakota's food tax:
Three weeks worth of food
Over a year, the tax people pay on their food (state & local) is enough to buy all their food for three weeks. (6% x 52 weeks)
The tax takes food off the tables of economically struggling families.
South Dakota taxes people deeper into poverty
South Dakota is among the nations Terrible Ten states for regressive taxes. Taxing food is the most regressive part of the problem. [See the graph about regressive taxes in the pdf section.]
South Dakota taxes people deeper into life's struggles
Food is often the flexible part of the budget. When times get tough or when emergencies pop up, food gets shortchanged. If there were no food tax, the budget for food would stretch farther in the grocery store.
About one-third of the households in South Dakota struggle to make ends meet. (They are below 200% of poverty line, which is roughly equivalent to the Self-Sufficiency standard for South Dakota.)
Low- and middle-income people pay a bigger portion of their income in state and local taxes than those who are better off.
Nursing homes, even non-profit ones, pay tax on the food they buy. They have other pressing needs for those funds.
South Dakota is 3rd among the nation's "Terrible Ten" states for regressive taxes. This means people with less income pay a higher portion of that income for state and local taxes, while those with the highest income pay the lowest % of income. It means the tax burden falls harder on the lower incomes. The result is that the lower- and middle-incomes have less money left to buy the things they need.
The poll tax was ended, because people should not
have to pay a tax before they can vote.
It is time to end the food tax, because people should
not have to pay a tax before they can eat.