why02

Bills in the 2010 and 2011 state legislatures would have ended the state's portion of the food tax. They would have replaced the revenue from state's 4% food tax with a 3/10% adjustment to the non-food rate. This maintains state revenue. It would leave tax on pop & candy.

This would have helped middle- and low-income families, seniors, and nursing homes. Everyone would have come out ahead whose non-food spending subject to sales tax is less than about 12 times their grocery spending. That's most everyone.

Of course, the general sales tax rate should not go up any more than necessary to get the tax off food, because when costs go up, families have less for the flexible parts of the budget. Food is a flexible part. Also, the sales tax applies to heat and car repairs, which need to be kept as affordable as possible.

What about people with food stamps?
Wouldn't it hurt these very low-income people? (That's what some state leigislators argued as an excuse to oppose the bill.)

Even people with food stamps want this tax off food, even though food stamps are not taxed.

• Most of them buy food with cash in addition to their food stamps. They have little discretionary cash for sales-taxable spending. (Rent, car payment and car insurance, and gasoline do not have sales tax.) As long as their remaining non-cash sales-taxable spending is less than about 12-13 times their food purchases, they will benefit from HB1255. They generally don't pay tax on their heat. Many have heat assistance in winter. (Eligibility for heat assistance is 160% of poverty, while elig. for food stamps is only 130%.)

Example if the shift makes the non-food rate 4.3%: Someone who buys $50 food will benefit as long as non-food sales-taxable spending is less than $666. But people on food stamps don't even have $666 after rent, car payments and gasoline (expenses that do not have sales tax.).

• What about the rare folks who get by only on their food stamp allotments without buy additional food? It may surprise some to learn that even these food stamp participants agree the state shoud make this tax shift.
For example, When asked about this tax shift, one such thrifty mom (whose 2 children are small) said she thinks we should do it, not only because she hopes to get off food stamps, but she is concerned about her neighbors who can't make it through the month, especially a family with 2 teenagers.
If the poor can have such a generous spirit, who are we to hold back the help we can give to so many middle- and low-income people?

• 2010 Statement by Matt Gassen, Director of Feeding South Dakota (which distributes food to over 400 agencies in SD)
"No other tax so directly takes food off the family table as the tax on food items. To shift the tax off food as proposed could be one of the single most significant pieces of legislation to impact the hungry of South Dakota in a long time. With the continuing increase in the numbers of individuals (78,000 statewide) seeking emergency food assistance a recent study shows that 32% choose between buying groceries and paying for utilities or heating fuel, 29% choose between food and rent/mortgages and 32% choose between food and gas for their cars. The passage of this bill would make the family budget go farther and increase the amount of food that their grocery dollars would buy. It could also help to ease the strain on emergency feeding programs who are struggling to find enough food to help all those in need."

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• Over a year the money families pay in food tax would buy their for 3 weeks. You could think of it as two gallons of milk or a couple bags of apples or 20 lbs of potatoes added for every 100 dollars spent.

• South Dakotans ended the tax on medical services and outlawed paying to use toilets.
It is time to end the indecency of taxing people on the food they eat in their own homes.

• You don’t pay a tax before you can vote or before you can breathe. No one should have to pay a tax before they can eat. .

Three dads speak up:
In one family of three, the father would rather use their approx $25/month food tax to help put gas in the car.
Mike R. says his family’s food tax would pay for his house insurance.
Jim W. said, "What my family pays in food tax each year could pay for 3 months of after-school care for our son."

•Even middle-class families often have big medical bills and other financial set-backs. They have enough stresses already. South Dakota should not be making matters worse with a tax on food.

(2004) Mr. Timm, a school custodian, whose wife has cancer, skips breakfast and some dinners too. He said, "Occasionally I do come home and I'll eat, but occasionally I don't. I just feel like I need to leave that for them (their children)."
When people tell Mr. Timm they do not support ending the food tax, he says, "YOU might be able to afford it right now, but I'm having a hard time, and it's not just me."
The Timm family does not qualify for the food tax refund, due to income. But he could eat more breakfasts, if the tax on food were ended.

The refund system does not meet the need. See Refund Program section of this website
• The food tax injustice is not solved by the state's food tax rebate program. It helps a few, but it misses 99.7% of the low-income households in the state.