Should South Dakota repeal the contractor’s excise tax?

Added January 23rd, 2013 by

SB 91  An Act to reduce the rate for the contractor’s excise tax over a period of time and to repeal the contractor’s excise tax in three years.

Currently  South Dakota’s 2% contractors excise tax is projected to generate revenues of $90 million for the state general fund in fiscal year 2014 (FY14).  The historic annual revenues are graphed on the chart below1.   Senate Bill 91 would reduce the rate for the contractors excise tax each year for three years and repeal it in 2016. 

Proposed tax rate decrease:  SD Contractors excise tax state revenues

FY13 (current):     2%
FY14:                     1.5%
FY15:                     1.0%  
FY16:                     0.5% 
July 1 2016:          repeal

1Chart by SD B&PP based on data from SD Department of Revenue Annual Reports 1999 to 2012 and FY2014 Budget Book

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