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Legislature mulls tax exemptions on wide variety of goods and services
By The Associated Press | Sunday, February 01, 2009
MITCHELL -- A range of things from baseball umpires to mink farms and emu
producers would lose tax exempt status under legislative proposals designed to
increase state revenue during this recession.
Gov. Mike Rounds is proposing to repeal some exemptions to raise an estimated $3
million in ongoing revenue for the state and up to $1.6 million for cities.
In his State of the State speech to the Legislature on Tuesday, Rounds said
he believes "it's better to have previously exempted products included in
our tax base rather than increase tax rates on everybody else."
"When it comes to sales taxes, the best taxes are those where the burden is
shared as equally as possible without special exemptions," he said.
Some of the exemptions that Rounds wants to repeal have only been on the books a
few years. In 2005, legislation to exempt the gross receipts of any person
officiating an amateur sporting event — not including elementary, secondary or
postsecondary school events — passed the Legislature with only one
"no" vote.
Rounds vetoed the legislation, but the Legislature overrode the veto. Amateur
baseball umpires are the primary beneficiary of the exemption, and longtime
amateur baseball player and former state Rep. Dave Gassman, D-Canova, was the
legislation's prime sponsor.
Legislation filed this year, SB43, would repeal the exemption for amateur
sports officials. It also would repeal exemptions for the gross receipts of
rodeo promoters, stock contractors, stock handlers, announcers, judges and
clowns.
State Rep. Lance Carson, R-Mitchell, said the loss of the rodeo exemptions would
negatively affect the Corn Palace Stampede Rodeo in Mitchell. If the rodeo
spends a combined $50,000 on a stock contractor, announcer, clown and
bullfighter, Carson said hypothetically, the addition of a 6 percent sales tax
to those services would increase the rodeo's costs by about $3,000.
"They're going to have to come up with that," Carson said, referring
to rodeo committee members, "because the stock contractor and announcer and
bullfighter aren't going to take a drop in their income."
SB43 is among four bills already filed to repeal existing sales- and use-tax
exemptions. The bills were filed before Tuesday's opening day of the Legislature
by the Committee on Taxation and at the request of the Department of Revenue and
Regulation, which answers to the governor.
The other bills and the targeted exemptions:
- SB44: Gross receipts from sales of ostriches, emus, rheas
and furbearing animals raised in captivity for breeding or other purposes,
such as foxes, rabbits, minks, chinchilla and karakul.
- HB1072: Gross receipts from the sale of property that the
buyer intends to lease, such as leased office or construction equipment; ink
and newsprint when used in the production of shoppers' guides; gross
receipts from the sale of agricultural and industrial production equipment
in international commerce; and equipment, such as that used by a contractor,
older than seven years that was purchased elsewhere and transferred to South
Dakota for use here.
- HB1073: Chemicals purchased for use by lawn and garden
services; freeport merchandise and stocks of merchandise brought as foreign
or domestic merchandise into South Dakota's foreign-trade zone in Sioux
Falls; and the gross receipts from library copying charges.
http://rapidcityjournal.com/articles/2009/02/01/news/legislature/2008_stories/doc496fd02b2ac47378675276.txt
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