A temporary sales tax cut enacted last year would be made permanent under a bill passed Friday by the South Dakota House of Representatives, in line with a call by Gov. Kristi Noem.

The Republican-controlled House approved the bill brought by Republican state Rep. Chris Karr in a 54-12 vote. It now goes to the Senate.

Karr touted the state’s healthy economy and said the state shouldn’t be collecting more money than it needs to operate.

“Those dollars should go back. They should go back to the people,” he told the House.

Republican state Rep. Roger Chase opposed the bill, saying he doesn’t want to tie the hands of future lawmakers who will be the ones to make budgetary decisions and set tax rates.

Sales taxes are the biggest contributor to South Dakota’s state revenues.

Noem urged the Legislature last month to make the four-year sales tax cut permanent. She campaigned for reelection in 2022 on a promise to repeal the state’s grocery tax, but the Legislature opted for the sales tax cut of 0.3%, or $104 million annually.

A proposed 2024 ballot measure would repeal the state’s grocery tax.

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