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Legislature mulls tax exemption for rodeo

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.